Williams against Smith; The Same against The Same

Williams against Smith. The Same against The Same. The purchaser of a vessel bottomed, not knowing her to be so, has an insurable interest in her, and the policy underwritten in ignorance of such fact, is not thereby vacated. If, under such circumstances, the vessel ba in the course of her voyage sold under the bottomry, after an abandonment for want of funds to carry it on, the underwriter will be liable on his policy deducting the amount for which the vessel sold, from the sum at which she was valued. When the insured is master and consignee, and joint owner of the cargo, his selling it at a port of necessity, where the voyage was broken up, will be deemed a reception of the goods there by him as owner, and a pro rata freight earned; the insurer on it is, therefore, bAble only for the balance. These were two actions on sepárate policies of insurance, on the body and freight of the American ship Prosper, from New-York to Algiers, with liberty to touch at Cadiz. The vessel valued at 5,000 dollars. The facts were exactly the same as in the former suit, apon the policy on her cargo. It was admitted, that the amount of the bottomry was 20,000 marks banco, or 6,500 dollars. The judge before whom the causes were tried, charged the jury, that if they believed the port of Cadiz was blockaded at the time the Prosper entered that harbor, this being a breach of neutrality, would vacate the nolicy. That the lamages and repairs of the vessel having happened, and been made, at distant periods, (the first, between the arrival of the vessel and the 14th of October, when she was blown to sea,'and the second, between that day and the 15th oi November,) were to be considered separately, in determining whether the loss was total; or partial; and that to constitute a total loss, the subject must be injured, or impaired in value to the amount of one half. That the plaintiff appeared to consider the several injuries as merely partial, because he repaired the vessel both before she was forced to sea, and "after her return to Cadiz, 'and previous to her abandonment there. That the wages and provisions during detention in Cadiz were to be deemed general averages; and, lastly, that a pro rata freight was earned as far as Cadiz. The jury brought in their verdict in the following words: “The jury find for the plaintiff an average loss on the ship Prosper and freight, allowing four-fifths of her freight, or 2,'400 dollars, to have been earned on her arrival at Cadiz. The jury are of opinion, that in making up the ^amount of the general average, the seamen’s wages and provisions should be charged during the detention, on the principle that the detention was unusual, and presents an extraordinary case within the hazard insured against by the policy.” A motion was now made for a new trial, on the part of the plaintiff, by whom the following points were relied on: 1. That the captain’s want of funds to repair the injuries of the ship, and get her to sea, was a just cause of abandonment. 2. That if the plaintiff’s claim is to be affected at all by the bottomry bond, it only renders him liable to account to the defendant for the value of the ship at the time she was seized and sold at Cadiz, the amount of which sales shows her value. 3. That the plaintiff has a right to be reimbursed the moneys expended in repairing the ship, whatever may be his right to recover with respect to the ship herself. 4. That the freight was totally lost, by the voyage to Algiers, &c. being defeated, as no part of it became payable-until the cargo was delivered there. 5. That if the ship earned a pro rata freight, the plaintiff has a right to apply the proceeds of the cargo which he received, or so much as will be necessary for that purpose. On the part of the defendant, the points insisted upon, were, > 1. That Cadiz was a blockaded port. 2. That the plaintiff had not an insurable interest in the ship, except for the surplus value, beyond the sum mentioned in the bottomry bond. 3. That if the vessel was insurable by the plaintiff, still, that as the defendant was deprived of the property abandoned, by the seizure under the bottomry bond, the plaintiff cannot recover. 4. That if the loss is to be ascribed to the fever, it is not a peril within the policy. 5. That one third is to be allowed in the repairs, new for old. Biggs, for the plaintiff. The subject of blockade has been sufficiently argued in the preceding cause. On the first point it is admitted, that if there was a want of funds to ^continue the voyage, it was a legal sanction for abandoning. For allowing her repaired, if unable to fit out for sea, without selling so much as would break up the voyage, the right was still the same. OazehtY. St.-Barbe, 1 D. & E. 187; Goss v. Withers, 2 Burr. 696; Hamilton v. Mendez, 2 Burr. 1209, the third resolution. The second question is in fact this, whether a bona fide owner of a vessel, who does not appear to have given the bottomry bond, has not as extensive an insurable interest as if the bond did not exist. This will depend on, whether the bottomry was then a subsisting lien on the property ? A bottomry given abroad is a charge on the ship only to the next, or, at the utmost, her home port, on her arrival at which it ought to be put in force. If it be not, and the vessel be permitted to sail on another voyage, the lien is gone against a third person, who comes in as a purchaser, without notice, for a full consideration. In this situation the plaintiff st'ands. Though it must be confessed, the Court in Spain has acted on a different principle, it ought not. however, to control our own law. But it is evident, however this may be, the bottomee is not the legal owner; the bottomer cannot at law commit barratry. Leidn v. Suasso, 2 Marsh. 452, 453. So little is the person holding a bottomry bond the legal owner of the ship, that he cannot, by insurance, under that word, cover his interest. Abbott, 117, s. 20; Bobertsons v.-, in this court. Here, then, as we paid, with the money laid out, the full value insured upon the ship, and as she was discharged from the bottomry, by the laches of not putting the bond in force, we were entitled to a verdict for a total lost. But allowing the policy affected by the bottomry, we are to account for no more than the sum produced by her sale, and the balance is what we have a right to claim; as, however, her price was increased by the value of the repairs we gave her, to that extent also we ought to recover. Every reason which will operate in our favor, on the vessel, can, with equal efficacy, be applied to the freight; for this is to be supported only on the principle of ownership. If we have a just demand for any freight, it must be for the whole, the contract being in a gross sum, and not so much per barrel, or cask. In these cases, therefore, as there is no apportionment, the whole being due on arrival at the port of delivery alone, *every loss must be total. ' Paul v. Birch, 2 Atk. 621; Abbott, 244 That the contract for freight was by bill of lading, and not by way of charter party under seal, is immaterial, as would seem from the reasoning in Goolce v. Jennings, 7 D. & E. 381. Bright v. Cowper, 1 Brown! 21. The only exceptions to this rule are, first, where the ship being incapacitated from pursuing her voyage, and the master being willing fo procure another to transport her cargo, the merchant will not agree; secondly, where the shipper consents to reeceive his property at an intermediate port. In the first of these cases the whole, in the latter a pro rata, freight is earned. But the acts of the plaintiff in this respect were all done in the ■character of master. The bill of lading was to deliver to another, his joint interest therefore immaterial. Iiarison and Bogert, contra. The bottomry »s in itself an insurance pro tanto, and therefore the surplus only can be insured, according to the words of our policies. Was it otherwise, a man might hypothecate three or four times over, insure the full amount, and recover from the underwriter also. It must be supposed that the purchaser took the Prosper with her encumbrance, like mortgaged lands. The maxim of caveat empior shows this, and at all events, as 'the plaintiff was on the spot when she was sold, and authorized to work, labor, &c. for the underwriter, it was incumbent on Captain Williams to have interposed a claim for the defendant. This is such a species of default as must make him liable to us, and therefore ought to prevent his recovery. It lias taken from us the subject matter of insurance, which, after abandonment, he ought to have protected; for if the bottomry was not a lien subsisting, the ship might have been reclaimed. It would seem, however, to be otherwise; for if not, a ship might be fraudulently sent, instantly after her arrival, on a new voyage, and the bottomry thus defeated. The interests of commerce require a different rule. It is to be supposed the purchaser knew of the encumbrance ; if so, it ought to have been communicated, and this would also vitiate the policy. Tor this purpose, everything that has been said, as to blockade, is equally fatal. But there was not any insurable interest, for the amount of the bottomry exceeded the cost of the vessel. Allowing, however, a surplus from the sale even from that *as the jury have found only an average loss, there must be a deduction of one-third, new for old. A total loss on the ship, it cannot be. Her first repairs made her fit for sea, and though, after the storm, her cargo might be more than half deteriorated, that would not justify abandoning the ship, though her decay might authorize an abandonment of the cargo, as it would be a breaking up of the voyage. This shows on her it can be only a partial loss. There is no evidence that she was deteriorated a moiety of her value. The cases cited to show no freight was earned, prove the reverse; ior they were on charter parties under seal, and expressly show the distinction denied. Wherever the master is not requested to take on the goods, he is entitled to pra rata freight. Luke v. Lyde, Burr. 889. And here, as the plaintiff was owner of the ship, and consignee, he cannot, in that double capacity be considered as acting wholly for his own benefit, and to charge the underwriter. As shipper, he was bound to pay; as owner, to receive freight; his actions cannot be construed to be totally as agent for the insurer, to enable him to receive everything and pay nothing. The jury find a pro rata freight earned; this could have been only on the supposition that the goods were received by the plaintiff. Hamilton, in reply. If the interest of the plaintiff he merely that of an equity of redemption, it is insurable. Allowing, therefore, that the interest was only a surplus, the policy is vaild, and we must recover for that. But not knowing the previous encumbrance, the assurance was made for the whole, and the premium paid for that. Both parties were in the dark; and in cases of mutual error, he who receives a consideration ought to be bound. The Roman code acts on this rule. So Millar, 40, 41, 97. If so, a secret encumbrance is at the hazard of the underwriter. If the vessel had been bottomed at a port of necessity, and on arrival at that of destination, though not that to which she belonged, the bottomry had been put in force, the insurer would have been liable for the whole, though the subject matter was lost to him, and that by the act of the insured himself; a fortiori here, where it was by a *third person. The policy being valued is an argument for this ; because in these the worth of the article insured is agreed on, and if a bona fide interest is shown, it is sufficient. The case of The Astroea, (1 Lex. Mer. Amer. 295,) said to be in point to show the deterioration of the cargo, will not warrant abandoning the ship ; but we were on the trial- prevented from showing the ship was half deteriorated; the judge charging the injuries to be distinct, and not to be considered together. This, we contend, was wrong, as the accumulated amount of repairs necessary, carried them beyond the half, though the money was not actually expended, but only seem to be necessary, and the impracticability of procuring it, obvious. If it appear that the whole cargo will not suffice to fit out, and money cannot be obtained on bottomry, it can never be necessary to sacrifice the cargo and expend it before you can abandon; yet this is the result of the defendant’s doctrine as to the want of proof of a deficiency of funds. If a man act in two capacities, one as agent for himself and another, and also representative for a third person, and his conduct will apply to the totus homo, it is a rule so to consider it. The cargo, then, was delivered to him as agent, for the underwriters alone, and this is corroborated by the entry in the consular books, which evinces on whose account the reception and sale were made. A policy of insurance being an instrument by which the underwriter agrees to indemnify for losses by certain perils, the very substratum of the contract seems to require, that there should be in the assured an actual mterest, either legal or equitable, which is capable of suffering a loss from the perils insured against. Eor, if there be not any interest, there cannot be any loss; and if there be not any loss, there cannot be, under the contract, any right to indemnity. Upon this train of reasoning, the court of errors reversed the judgment given by the supreme court on the case in the text, Eor, as the vessel was, by the valuation in the policy, estimated at only 5,000 dollars, when there existed a previous bottomry for 0,500 dollars, and she sold for no more than 1,925 dollars, it was held, that there was not any legal interest, that being in the bottomee; or any equitable interest, as there was not any surplus value beyond that for which she was hypothecated. Smith v. Williams, 2 Caines’ Cas. in Error, 110. A strict deduction from the same premises, would appear to lead to the total exclusion of wager policies, without the interference of legislative provisions. Yet, as actions on wagers themselves have been held to be maintainable, so wager policies have received the countenance of courts of law. Clendining & Adams v. Church, 3 Caines’ Rep. 141, and the cases cited there. In Massachusetts, however, contrary and purer doctrines seem to prevail; “or wager policies appear to be considered there as absolutely void. Amory v. Tyng, 2 Mass. Rep. 1. An interest, to be insurable, may be either legal or equitable, vested or contingent; but it must be a lawful interest, and there must be a subject matter in esse, in which it exists, or out of which it may arise. The interest must he a lawful interest-, that is, such as is within the protection, and within the policy of the law. Therefore, the interest of an enemy is not insurable; (Brandon v. Nesbit, 6 D. & E. 23; Bristow v. Towers, ib. 35,) nor of a subject trading with an enemy ; (Potts v. Bell, 8 D. & E. 548,) nor of a neutral in goods to an enemy’s port; (Bromley v. Besseltine, 1 Camp. 75,) nor from it if he be there resident, and carry on trade; (M‘Connell v. Hector, 3 Bos & Pull. 113,) nor that of mates or seamen in their wages, ora specific article by way of douceur or extra compensation beyond wages; (Webster v. De Tasset, 7 D. & E. 157,) nor that of a lender of money to a captain of a vessel to be paid out of the freight. Wilson v. Royal Ex. Ass. Co. 2 Camp. 623. But where the interest is such as is within the protection and policy of the law, it is insurable; as that of a governor in a fort used as a trading post; (Carter v. Boehm, 3 Burr. 1905,) of a captain of a vessel in his wages; (King v. Glover, 2 N. R. 206,) or of a neutral in goods from an enemy’s to a friendly port. Bromley v. Hesseltine, ubi sup. But quiere as to a policy in such a case, "at” and "from.” The interest must be legal or equitable. If it would not be acknowledged either at law, or in equity, it is not a subject of insurance. Therefore a person who has paid for a ship cannot, in England, insure the freight, unless his name be in the certificate of registry; (Camden v. Anderson, 5 D. & E. 709; Marsh v. Bobinson, 4 Esp. Rep. 98,) because, under the British register act, even a conveyance is absolutely void, if the name of the purchaser do not appear in the certificate; aliter with us, both as to ship and freight, even of an English vessel, unless the British register act be proved, for which parol testimony is not sufficient. Kenny v. Clarkson, 1 Johns. Rep. 385. A mere power, whether given by statute or otherwise, “to take into pos session, manage, sell and dispose of ” ships and cargoes detained by the orde of government, does not create an insurable interest. Lucena v. Craufurd, 2 N. R. 269, unanimously confirmed by ail the judges in the house of lords on the 29th of June, 1808, and overruling, on this point, the judgment in the same case, 3 Bos. & Pull. 75, and Craufurd v. Hunter, 8 D. & E. 13. Ii is therefore doubtful how far prize agents and others ejusdem generis, have any insurable interest in captured vessels and cargoes sent to them, unless *o far as their own commission, and liens for balances due, may extend. But if there be either a legal or equitable interest, though undivided, it is insurable ; as whore a statute enacts that property captured from the enemy shail be divided among the captors, their interests are insurable oven before condemnation. Stirling v. Vaughan. 2 Camp. 225; Boehm v. Bell, 8 D. & E. 154; Le Oras v. Hughes, Park, 358. Where there are a multiplicity of interests, either legal or equitable, in the same subject, each may be the basis of a separate policy, according to the right of the underwritten. Therefore, a mortgagee of goods, after the mortgage has become absolute, may insure his legal interest, and the equitable one of the mortgagor; (Smith v. Lascelles, 2 D. & E. 188, per Ashhurst, J.,) a third owner of a ship, his third of the freight; (Sansom v. Ball, 4 Dall. 459,) so, though he be entitled only in virtue of a purchase of a third of the tonnage for tho voyage; (id. ibid, but see Biley v. Delafield, infra;) an endorsor of a bill of lading, who has transferred only the net proceeds, his interest in the surplus value; (Hibbert and others v. Carter, 1 D. & E. 745,) a factor to whom a trader is indebted, the amount of his debt, in a policy on goods which he is advised will be shipped to him; (Godin v. Roy. Ass. Co. 1 Purr. 489,) for, wherever the law would give a man a lien on property, to that extent he may insure; (Wolfe v. Horncastle, 1 Bos. & Pull. 316,) and, from the case of Godin v. Boy. Ass. Go., it seems that a hona fide policy on the expectation of the consignment advised, will not be defeated by the consignor’fs making, against good faitlj,. a valid disposition of the promised remittance. A surety in a vioe-admiralty court, to whom a vessel and cargo are delivered over to indemnify him against loss, for becoming security on entering an appeal, has an insurable interest to the whole amount of both. Russell v. Un. Ins. Co., 4 Dall, 421. So a part owner, who charters the o.ther half of the vessel under an agreement to pay a certain sum in case of her loss, may insure her full value without disclosing the nature of his interest. Oliver v. Green, 3 Mass. Rep. 133. Note, however, the diversity between the British register act, and that of the United States. If there be a legal interest, it is not necessary that it should be beneficial, in order to render it insurable; therefore, a mere trustee, owner of a vessel not entitled to the privileges of the American flag; (Rhind v. Wilkinson, 2 Taunt. 237,) a fortiori, if it be beneficial, though merely equitable, as that of a cestui que trust for whose use goods are sent to a third person. Hill v. Secretan, 1 Bos. & Pull. 315. The interest' may he contingent; as tho commissions of a consignee; (Flint v. Le Messurier, Park, 355,) or of a captain on sales; (King v. Glover, 2 N, R. 206,) or the compensation of a supercargo out of the proceeds or goods of an adventure under his direction; (Robinson v. N. Y. Ins. Co. post, 357,) or the expected profits on a cargo belonging to the assured; (Grant v. Parkinson, Park, 354; ] Marsh. 97; Hodgson v. Glover, 6 East, 316; Tom v. Smith, 3 Caines’ Rep. 245; Mumford v. Hallett, 1 Johns. Rep. 433,) or those on a cargo to be purchased by investing, or exchanging another cargo. Barclay v. Cousins, 2 East, 544. So the interest of a creditor in the life of his debtor. Per Lord Kenyon, in Anderson v. Edie, Park, 575 ; Godsall v. Boldero, 9 East, 72. But there must be an actual existing subject capable of specific designation out of which the interest insured is to arise; therefore the expected profits or commissions on a cargo expected to be shipped, are not insurable. Wood v. Knox, Park, 356; 1 Camp. 543, S. C. Where the interest is of a particular kind, it must be disclosed and underwritten as such; as those of bottomry and respondentia; (Black v. Glover, 3 Burr. 1394; Robertson & Brown v. Un. Ins. Co., 1 Johns. Cas. 250,) or that of freight reserved to the vendor of a vessel, for the voyage next after her sale. Riley v. Delafield, 7 Johns. Rep. 522. But see Sansom v. Ball, 4 Dall. 459, where this point is not made. In the case put, the bottoming would be to protect the property, assured, in which the underwriter had an interest. The bottomry in the principal case prevented his interest from arising. [MAJORITY — Thompson, J., Livingston, J.] Thompson, J., delivered the opinion of the court. Several of the questions raised in this cause have already been disposed of in the preceding case, against the same defendant, upon the cargo of the same vessel. The circumstances relative to the blockade of Cadiz, and the detention in consequence of the fever that broke out at Cadiz, shortly after the arrival of the vessel there, are necessarily the same. It having been decided that Cadiz could not be considered a blockaded port, there could be no objection against this vessel’s putting in there, pursuant to the permission given in the policy. It is manifest, from' the whole current of the testimony, that there existed a pretty strong necessity to put into Cadiz for the purpose of repairs, and that this was the sole object, and not for the purpose of trade. The captain appears to have acted with as much de-spatch in procuring the repairs *to be made, as the state of things at Cadiz would warrant, to have been anxious to pursue the voyage to Algiers, and did everything in his power to accomplish it, until misfortune after misfortune had so increased his expenses that he found it impossible, from the want of funds, to proceed. Thus far the facts in these cases are the same as in the case on the cargo. But in the case on the ship it appears that, before and after the time the plaintiff purchased her, she was under a bottomry bond for upwards of 6,000 dollars, given by Cas-simir Delavigne, the former owner, of which the plaintiff was wholly ignorant. That while she lay at Cadiz, after «ill her repairs were made, though not until the plaintiff found that it was no longer in his power to proceed on the voyage to Algiers for want of funds, and had determined to abandon it, proceedings were instituted against the vessel under this bond, in consequence of which she was seized and sold by order of the Royal Consulado at public auction for 88,500 reals vellón, (about 1,925 dollars,) which sum, after deducting the charges, was paid to the holder ol the bottomry. A question then arises here, whether the plaintiff had an insurable interest in this vessel, she being under a bottomry bond to more than the amount of her value in the policy. The assured had, we think, an insurable interest in the subject. He, having possession and the right of redemption, must be considered the owner for the purpose of insurance. The hypothecation does not transfer the property of the ship, but only gives the creditor a privilege or claim upon it to be carried into effect by legal process. Abbott, 117. The owner of a ship who has mortgaged her, and who is also master of her, cannot, while he is possessed of the equity of redemption, commit barratry; because he is still considered as the owner, notwithstanding the mortgage, and so cannot commit a fraud against himself. Lewin v. Suaso, in chancery, Marsh. 452. The doctrine, that the person having the possession and holding the equity of redemption, has an insurable interest, is strengthened by the decision of this court in January term, 1801, in the case of Robertson, that the person holding the bottomry *bond has not an insurable interest, without there is a special clause inserted in the policy, designating the particular interest insured. There is nothing, we think, in the conduct of the plaintiflj showing want of good faith; all the witnesses concur in representing that he was extremely solicitous to pursue the voyage to Algiers, but that he was obliged to abandon it for want of funds. This was on the argument admitted by the defendants counsel to be, as a general principle, sufficient cause for abandonment, and breaking up the voyage. We see nothing in this case to take it out of the general rule. The difficulty and embarrassment which the plaintiff met with in raising funds, were not occasioned by the bottomry bond. No claim was made on this vessel by virtue of that bond, until after the captain had determined to abandon the voyage. The next question, then, will be as to the amount of the loss of the ship. The underwriter, ■ we think, clearly ought not to suffer in consequence of the encumbrance on the ship by the bottomry bond ; this is a loss that must be sustained by the plaintiff; or, for which he must look to the - person from whom he purchased the vessel. In ordinary cases, immediately on the abandonment, the subject insured would become the property of the underwriter, and he would be entitled to receive its full value. If, then, the underwriter has been deprived of this property in consequence of a lien or encumbrance for which he is not answerable, the assured must put him in the same situation he would have been in, had no such lien existed; that is, in the present case, by deducting the value of the vessel at the time of abandonment, from the amount of the insurance. And we know of no better rule by which to ascertain that value, than by the sale, provided there was no fraud or collusion. Had not the ship been seized under this' bottomry bond, the captain would have been obliged to sell her, as the voyage must have been broken up ;■ the sale would have been at the same place, and under equally unfavorable circumstances. We can discover no fraud or unfair conduct in the transaction. She was sold at public auction under the direction of a public officer, and we think the price for which she was sold, must, prima fade, be considered her true value, and *this being less than one half her true value, there was, of .course, a total loss. We are therefore of opinion the verdict was against the evidence, and that a new trial be granted on payment of costs. With respect to the case on the freight, we are satisfied with the verdict of the jury, that there was a pro rata freight earned, to wit, four fifths of the whole, imounting to 2,400 dollars. The owner of the vessel was also master, and pan owner of the goods. We take it to be a rule well settled, that where a ship by reason of any disaster, goes into a port shore of the place of destination, and is unable to prosecute and complete the voyage, and the goods are there received by the owner, freight must be paid according to the proportion of the voyage performed. This rule is certainly founded in justice and equity, and ought to receive a liberal application. The master here, acting in the double capacity of captain of the vessel and owner of the cargo, interfered, and disposed of the goods, and although, perhaps, it may be difficult to say whether in such a disposition he acted in his capacity of owner or master, yet, we think, prima facie, he ought to be considered as acting in that capacity which leads to the most equitable result, and best answers the end of justice. The circumstances under which the cargo was received and disposed of by the plaintiff, were submitted to the jury, who, by their decision, must have considered him in that transaction, as acting in his capacity of owner; and in doubtful cases where the justice of the case is with the verdict, we think the court ought not to interfere and set it aside. The opinion of the court, therefore, is, that the plaintiff take nothing by his motion. Livingston, J. Judgment was given in favor of the plaintiff- on two other policies on this voyage; the one on ship, and the other on cargo. I concur in all the points determined, except as to the effect of the bottomry on the insurance, and in conclusion that the voyage was finally defeated from a want of funds. Here, also, I agree in the opinion just delivered, that a pro rata freight was earned as far as Cadiz, and that if the plaintiff be entitled to recover at all, the verdict is right; but I cannot think the defendants are liable for any thing on this policy. *It is essential to the validity of every contract of this kind, that an account be given to the underwriters of every mateial fact, which enhances the risk. This account, in other words, should be exact and complete, because the insurer computes his risk by it. If, therefore, any circumstrance be suppressed or concealed, which the insured knows to exist; and which, if disclosed, would entitle the other party to demand a higher prenium, the contract is void; for every intentional concealment of circumstances which vary the risk, is regarded as a fraud. But it is not only a fraudulent concealment or misrepresentation that will vacate a policy. If a representation be mabe from oversight, or with the utmost good faith, and without any design to impose, still, if it be of a material fact, and not true, there is an end to the policy. There is no reason why the same rule should not apply to an unintentional concealment; nor ought it to form any excuse that the assured knew nothing of the fact concealed. He is supposed and ought to know every thing material that relates to the subject of insurance, and is presumed to be in a situation to lay before the underwriters every matter necessary to form a just estimate of the risk he is about to assume. The property is his, and by a moderate degree of attention he might obtain every necessary information respecting it. If he does not, he must be deemed guilty of. negligence, for which he alone ought to suffer. If neither of the parties know of a circumstance which subsequent events have discovered to be important, the contract is founded in mutual error, in which case the parties cannot be said to have assented to it. If the assured had known the circumstances, he would not have effected an insurance at all; or would have disclosed it to the underwriters, who would have declined the risk altogether, or have asked an increase of premium. These principles accord with those which are laid down and illustrated by Mr. Millar, in his Law of insurance. “ Every instance of misrepresentation and concealment,” says this learned author, “ however unintentional, if it varies the risk under-talcen, in the minutes particular, from that understood, destroys the consent of parties, and annuls the contract.” “It implies not only mistake, *butmistake founded in fault.” “ Guipa lata," say “ equibartur dolo." Page 49. It remains to show the application of these principles to the present case I am now considering. "Whether, in virtue of the abandoment at Cadiz, the plaintiffs be entitled to call on the defendants for payment of their subscription to the policy, inasmuch as she was, within ten days thereafter, and before the defendant could by any possibility have heard of the abandonment, seized to satisfy a bot-tomry bill of which they knew nothing ? The insured, before an indemnity can be demanded of an underwriter for a technical total loss, must abanden or cede to him all the property that may be recovered from shipwreck, or any other peril enumerated in the policy. In virtue of this abandonment, the underwriter is entitled to the property saved, and to dispose of it as he may think proper. But if the property thus ceded be withheld from any other cause than from one of the perils insured against; or if he cannot obtain possession for any other reason than on account of such peril, he ought not to be held to pay for the loss. It is certainly part of the contract, that in case of abandonment, the assurer shall have the property saved so far as his insurance extends; and if this right be defeated by any act of the assured, or by any circumstance not within the perils insured against, and not known to the underwriter, he cannot, without manifest injustice, be chargeable. In this case the property was kept from the defendants, and the object of the abandonment thus defeated, not by any accident within the policy, but by enforcing a mortgage which existed long before tho insurance was effected. It cannot be pretended that the defendants assumed this risk, nor that they would, but for a very large premium, have exposed themselves to it. It is not enough that the plaintiff is willing to credit them with the proceeds of the sale under the sentence of the Spanish tribunal, which -were applied to extinguish the bond. It is the saie itself of which they complain. No one can say that a compulsory disposition, in a foreign port, of any American vessel, and that for cash, will fur' nish a fair criterion of her real value; nor is it probable that the defendants, is left at liberty, as they ought to have been, would have sold her *in a way, which could not but be attended with great sacrifice. They would probably have ordered her to this country, or pursued other measures to mate the most of the property. This reasoning may at first appear more applicable to an insurance on the' vessel, but I have not thought it necssary to make any distinction ; for, on the principles on which I proceed, if the voyage were impeded, or finally defeated, by occasion of the bottomry; the underwriters on freight ought to be more liable than those on the ship. But it is alleged, that it being determined to abandon the voyage previous to any proceeding on the bottomry, and the underwriters being fixed by such abandonment, it is of no importance what became .of the property afterwards. Without examining the effect of an abandonment of a voyage, thus declared abroad before a consul, and without any communication of it until long after to the underwriters, I think it has been already shown that even if the abandonment were good, yet if its object, as it regarded the defendants, were defeated by judicial process not grounded on any marine peril, there ought to be no recovery. The want of funds, I am satisfied, was a mere pretence to break up the voyage, before a seizure took place under the bottomry. It is incredible that in such a city as Cadiz, between which and New York there is a constant commercial intercourse, it should not be practicable to raise funds necessary to repair the Prosper; but if such difficulty existed, it may fairly be imputed to the owner’s inability to give an adequate security on the vessel in consequence of the antecedent hypothecation, and this furnishes another reason for not rendering the underwriters liable. But for this obstacle, no doubt, money would have been raised. My own belief is, and it is warranted by the whole course of the transaction, that no idea was entertained of abandoning the voyage to Algiers until after Williams discovered that the bottomry bill was in Cadiz; and that to avoid an arrest on that account, he contrived to put a period to the voyage, pretending that no funds were to be had to pay for or finish the repairs. How could this be possible? Mr. Terry, the American Consul, had already paid for all the repairs which had been put on previously to her being blown to sea; and it is very evident that when she was thus forced out of *the bay of Cadiz, she was preparing to go to A1 giers. The injury she sustained at this time was too trifling to cause any delay, and the repairs of the former injuries being paid, I regard as wholly fictitious the difficulty about funds. I neither believe it real, nor that it had any influence in terminating the voyage. My opinion therefore is, that a new trial be granted, not, however, because the damages are too small, but because the plaintiff is not entitled to recover any thing. In the action on the ship new trial granted. In that on the freight refused. Quern, whether some distinction is not to be taken between eases on bottomry bonds and those on bottomry bills ? In the first, the vessel is mortgaged and assigned to the lender; in tho latter, she is bound to the payment. And liere again a difference may arise between cases in England and cases here, on account of the wordings of the register acts of the two eountries.