Schooner METEOR, sprung a leak and sunk; total loss on Lake Ontario, April 1874. Loss $2,200.
Casualty List for 1874
Chicago Inter Ocean
December 25, 1874
Schooner METEOR of Oakville, sank 5 miles from Oswego, Lake Ontario.
Chicago Inter Ocean
April 16, 1874
Schooner METEOR, of 61 Tons. Built at Wilson, N. Y., by Littles in 1856. Owned by F.J. Brown. Home port, Oakville. Valued at $2,000 Class B 2. REMARKS - Repaired in 1872
National Board of Lake Underwriters
Lake Vessel Register for 1873
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METEOR Schooner of 85 Tons. Built at Wilson, N. Y., by Little in 1856. REMARKS - Full of water.
Association of Canadian Lake Underwriters
Lake Vessel Register for 1873
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METEOR Schooner of 85 Tons. Built Wilson, U. S., by Little in 1856. Owned by Brown. Home port, Montreal. Value $3,500. Class B 1. Remarks - Last surveyed Feb. 1874
Association of Canadian Lake Underwriters
Lake Vessel Register for 1874.
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NOTE :- in the "Report on Court of Common Pleas, Court of Upper Canada" Brown Versus The British American Assurance Co. -- A summary of a long legal fight and appeal, in which the owner of the Schooner METEOR, cancelled the policy and tried to insure the vessel with another Company, this was one day after the vessel was lost, the owner did not know this but the insurance company with which he cancelled did, his case was won and he was entitled to recover on a $2,000 Policy, he was also awarded $1,940 Damages. A witness, a sailor on the METEOR, one Charles MacRae, swore she was lost on the 12th. of April, 1874. She sprung a leak; her pumps were frozen up. She became disabled on Saturday, April the 11th, she sunk about 4 miles from Oswego, about 3 o'clock on Sunday afternoon the 12th. A Telegram was produced from the Montreal Telegraph Office, sent from Port Dalhousie at 8:50, April 13th., "Schooner METEOR sunk off Oswego - All hands saved." (Full report below)
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BROWN v, THE BRITISH AMERICA ASSURANCE COMPANY.
Marine policy -- Loss -- Cancellation after -- Ignorance of the loss.
Where to an action on a policy of insurance on plaintiff's vessel, the defendants pleaded that before the loss the parties cancelled the policy, while the evidence shewed that the cancellation took place after the
Held, that the plea was disproved, and that the plaintiff was entitled to recover.
Per Hagarty, C. J. -- Knowledge on the part of defendants, and ignorance in the plaintiff of the loss having occurred at the time of such cancellation would reneder it inoperative; and even if the defendants were equally ignorant with the plaintiff, the cancellation would still be void as made under a common mistake of fact.
DECLARATION on a marine policy for $2,000 on the schooner "METEOR," averring a total loss by perils assured against.
Pleas: 1. Non est factum.
2. That the plaintiff had no interest at the time of loss.
3. That the plaintiff had assigned the policy to one House without the defendants' written consent.
4. That the plaintiff's insurable interest was in a mortgage of the vessel, and that he had assigned his mortgage to one House, without the defendants' written assent.
5. That before loss the plaintiff assigned his interest in the policy and vessel to House, and after the assignment brought the policy and the assignment to the defendants to get their written consent : that the defendants refused to consent unless the premium note for $175 (given by the plaintiff for the premium) was endorsed by House, the assignee: that the plaintiff declined to accede to this condition; and thereupon the plaintiff and defendants mutually agreed that the insurance should be cancelled and abandoned, and the said policy and the premium note respectively given up and destroyed; and they were given up and destroyed accordingly; and thereupon the said policy and premitun note were mutually abandoned, cancelled and discharged."
Issue was joined on these pleas.
There was also a second replication to the fifth plea; that the plaintiff was induced to make the said agreement by this fraud, covin, and misrepresentation of the defendants.
The case was tried before Strong, J., and a jury, at Toronto, at the Spring Assizes of 1875.
It appeared that the tessel was lost by foundering.
Charles Macrae, a sailor on board., swore she was lost on the 12th of April, 1874. She sprung a leak; her pumps were frozen up. She became disabled on Saturday, April the 11th. She sank about four miles from Oswego, about 3 o'clock on Sunday afternoon, the 12th.
A telegram was produced from the Montreal Telegraph Office, sent from Port Dalhousie at 8:50, April 13th;
" Schooner METEOR sunk off Oswego -- all hands saved."
The plaintiff held a mortgage on the vessel, and had insured his mortgage interest with the defendants from the 1st of April to the 15th of November following.
He was negotiating a transfer of his mortgage to House.
On or about Wednesday, April the 5th, he went to the defendants' office.
The assignment of the policy was prepared by filling up the blank endorsed, and executed by the plaintiff The defendants were asked to assent to the proposed transfer. The plaintift was told that his note for $175, which he had given for the piemium, must, according to their rules, be endorsed by House as a condition pf their assent. Courneen, the defendants' marine inspector, went to see House, and told him this. He refused to endorse the note, Courneen telling him that the assent would not otherwise be given.
Courneen appeared to have had the policy with him. House said that he distinctly refused to accept the assignment of' the mortgage, unless the policy was assigned to him, and to his knowledge he said the policy never was assigned. From the evidence it appeared that no interest, either in the vessel or policy, had ever vested in House , and no complete assignment of the policy was proved.
The vessel, as stated, was totally lost in deep water on Sunday; and on Monday following she had no existence as a ship or as an insurable subject.
On the Monday morning Courneen said he met the plaintiff at the defendants' office, as he thinks about ten a.m. The plaintiff asked why the defengants refused to assent to the assignment, and he replied because House refused to endorse the note. The plaintiff asked what the company would take off the note if he would pay cash, and witness said 5 per cent. The plaintiff said, that at the Royal Canadian he could get 10 per cent off. It was then suggested to him to take it there. The premium note was then handed to the plaintiff, and he went out of the office with it.
Courneen, the defendants' marine inspector, said he knew the policy note was destroyed, as he saw pieces of it, but did not know when.
Evans, a clerk in the defendants' office, confirmed this statement. He said the policy was cancelled on the Monday, and the word "cancelled" on the back was in his (Evans's) writing.
Courneen and Evans both said, that at this interview they neither of them know or had heard of the loss of the vessel.
Courneen stated that he first heard of the loss from Captain Douglas; that he met him before 12; say 11:30.
Douglas stated that he thought he went to his office about 9:30, and heard of the loss shortly after. He went out, and said he met Courneen, and told him her had heard of the loss at the Western Assurance office. He thought this was before 11 o'clock. He would not swear positively it was not after 11, but it was before 12, and his impression was, it was before 11.
Jackman swore he met Courneen about a quarter past ten, and they spoke of the report about the vessel being lost. A man named Neilson, he said, was present. He said it was between 10 and 11; nearer 10 than 11, but he could not be positive.
Evans, being recalled, said, that not more than five or ten minutes after Courneen went out, and after the plaintiff had left the office, Courneen came back and told them something had happened to the vessel; but witness did not know what time that was.
The plaintiff swore that he came down that morning on the train from Oakville. It was due to leave Oakville at 10, but was rather late, and did not reach Toronto till past 11 o'clock; that Mr. Pierce, (afterwards explained,) was a fellow passenger, and that he left Pierce at a quarter to 12. He had gone with Pierce to House's office, and remained there about ten minutes, and talked with him about the policy; that he then went with Pierce to a druggist's to get some things, and then to another shop; that he parted from Pierce, looked at his watch, saw it was a quarter to 12, and then went to the defendants' office, and had a conversation with Courneen about the priemium note; that he told Courneen he could get 10 per cent off from the Royal Canadian, and Courneen said that that was the place to take it to; that Courneen said the policy was cancelled anyway; and the plaintiff said, if that's the way of it, and as his name was on the back of the note, he did not want to have the note round there if the policy was cancelled; that Courneen gave him the note, and the plaintiff tore it up; that it was five minutes to 12 when he left the defendants' office. He went straight to the Royal Canadian office, but they said they had information about the vessel then. He was to return at 2 p.m. He then went to St. James's hotel, and. was told the vessel was lost. After his dinner he went out and obtained patticulars. He then went to see Mr. House. After that, he and House met Courneen, and taxed him with knowing of the loss when they met at the defendants' office. Courneen denied this, and told him it made no difference, as he had cancelled the policy the preceding Thursday, when House refused to endorbethe note.
Courneen denied having said this,
Mr. Perry, the agent of the Royal Canadian Insurance Company, swor that, on that Monday morning, a few minutes before 12, the plarntirf came to him to insure the vessel, saying he had been insured by the defendants, but had cancelled the policy, as House declined to endorse the premium note, and they would only allow 5 per cent. off if he paid the cash; that witness did not then know the classification of the vessel, and could not then effect the insurance.
Pearce swore that he came with the plaintiff on the train from Oakville, reaching Toronto about ten minutes
after 11, and he was continuously with the plaintiff till a quarter to 12, when they separated at Lyman's store.
McGacben, the hotel-keeper, said he told the plaintiff of the loss of the vessel about 12:30; that he heard of it about 10 that morning.
House swore that the plaintiff came to his office on the Monday morning with Pierce; he thought about 11:30. He then told the plaintiff he would not endorse the premium note. Between 1:30 and 2, he was with the plaintiff when they saw Courneen, and the conversation stated by the plaintiff took place, Courneen denying that he had known of the loss when they met at the defendants' office, and saying that he had cancelled the policy on the preceding Thursday.
It was objected, on behalf of the defendants, that there was no evidence to support the replication : that there was no obligation to communicate loss, even if the defendant knew of it; and that fraudulent concealment did not come under the replication.
For the plaintiff it was contended that there was evidence of representation by conduct.
The learned Judge reserved leave to move to enter a non-suit on the points taken, and held that if Courneen had notice of the loss at the time of the canecellation of the policy and the giving up of the premium note, he ought to have communicated it, and that, not having done so, the rescission was void on the ground of fraudulent concealment.
It was left to the Jury to say.
1. Was there an actual assignment of the policy completed to House ?
2. Had Courneen knowledge of the loss at the time of the premium note being given up on the 13th of April ?
And they were directed that if they found that there was no subsequent assignment, and that Courneen had knowledge of the loss, then they should find for the plaintiff.
The jury found for the plaintiff, with $1,940 damages.
In Easter Term, May 20th, 1875, J. H. Cameron, Q.C., obtained a rule nisi to set aside the verdict for the plaintiff, and to enter a nonsuit, pursuant to the leave reserved, or a new trial on the law and evidence.
In Michaelmas Term, November 22nd, 1875, Bethune shewed cause. The evidence shews, and the jury have found that when the cancellation took place the inspector had knowledge of the loss; it was therefore a fraud on the plaintiff and void. The defendants, however, contended that even if the inspector had knowledge he was not bound to communicate it to the plaintiff, but such a contention cannot be supported. Even assuming that there was no fraud, the loss having occurred before the cancellation took place, the plaintiff's claim to the insurance money, became matured, and the subsequeny cancellation could have no effect. At all events, it could only be by release under seal. It amounted to an agreement entered into under a mutual mistake of fact, and therefore the plaintiff is entitled to to relief in rquity; Parsons on Contracts, 5th. ed,. vol ii,776-7; Chisolm v. Gadsden, 1 Strobh, 220; Fleming v. Slocum, 18 Johns, 403; Vine v. Mitchell, 1 Moo, & Rob, 337.
J. H. Cameron, Q. C., contra. There was no evidence of knowledge on the part of the defendants at the time the cancellation was made, This is denied by both the inspector and the clerk who canelled the policy. But even if there was such knowledge, there was no obiigation to communicate it to the plaintiff. The fact of the cancellation having been made after the loss occurred, does not render it inoperative. The whole question is, was there a cancellation in fact; Addison on Contracts, 7th ed., 288; Shep. Touch. 70; Heinekey v Earl, 8 E.& B. 410; Ingham v. Promrose, 7 C. B. N. S., 82; Bate's Dig. of Ins. Cases, 3rd ed., 156-9; Atlantic Ins. Co. v. Goodall, 35 New Hamp. 328. If, however, the Court shold be of opinion that a nonsuit should not be entered on the legal objections, then leave is asked for a new trial, to enable the defendants to furnish additional evidence to shew that the conduct of the inspector was bona fide.
December 22nd, 1875. HAGARTY. C. J.-- It is impossible to say that the verdict is contrary to evidence, or the weight of evidence.
It seemsdifficult to refuse credit to the very distinct evidence as to the time of the arrival of the train; and
Peirce's statement (corroborated by House) confirms the plaintiff's statement that he did not go to the defendants' office till nearly 12 o'clock. Perry's evidence also tends strongly in the same direction; and Neilson, Douglas, and Jackman are all, more or less, against the agent's statements.
We cannot, in our judgment, interfere with the verdict. It was the finding to be expected from any jury on such a case as this, and nothing is more unlikely than that any jury to be hereafter empannelled would arrive at any different conclusion.
I am satisfied there was no assignment to House.
It remains to consider, whether there be any legal difficulty in the plaintiff's way.
Assuming that the underwriters had notice of the loss (as the jury have held), we have a case of parties dealing on a total ignorance on the one part of a matter, the most vital to the whole transaction, and a knowledge by the other of such matter.
The ship had been totally lost the day before. The plaintiff had a clear claim on the defendants on complying with certain forms, for the sum insured, a cause of action vested in the sense of a valid claim for indemnity for the loss, The defendants knew all this. The plaintiff does not. He receives back the premium note, which he tears up, and leaves there, to insure in another company, when there was nothing to insure, when any contract of insurance the he might formally effect would he void, as having nothing on which to operate.
No evidence was given as to what time of the day the word "cancelled" was written on the poiicy.
It is to be hoped the law is not so lamentably defective as to allow such a transaction to be unimpeachable.
If one party had paid money to another under such circumstances, we have no doubt but he could recover it
back, as paid under a total mistake of facts.
We need only refer to the collection of authorities on that head in the notes to Marriot V. Hampton, 2 Sm. L. C., 7th ed., 405.
Even if the defendants were, equally with the plaintiff ignorant of the fact of the loss, a supposition which we
would gladly, if possible, assume as correct, the Court of Equity would, we think, set aside any agreement entered into on such a common mistake.
** Cooper v. Phibbs, L. R. 2 H. L. 149 (a), so declares the law. The Chancellor says, at p. 164; "athe appellant says, 'I have entered into an agreement under a common mistake, and I am entitled to be relieved from the consequence of it.' In support of that proposition he relied upon a case decided in the time of Lord Hardwicke, not by Lord Hardwicke himself, but by then Master of the Rolls; Bingham v Bingham, 1 Ves. Sr. 127, where that relief was expressly administered. I believe that the doctrine there acted upon was perfectly correct doctrine."
Lord Westhury says, at p. 170; " If parties contract under a mutual mistake and misappenenston as to their relative and respective rights, the result is, that that agreement is liable to he set aside, as having proceeded upon a common mistake.
I think the verdict must stand. Even if we give the defendants the credit of not knowing of this loss at the
time of this alleged cancellation, we cannot avoid the expression of surprise and regret that any respectable body of underwriters should have refused to pay a loss under such circumstances, or have striven to make an innocent party surfer from such a mistake."
It was urged in argument that the effect of upholding this verdict is to cast a stain on a meritorious official of the company. The defendants must, however, remember that their insisting on urging this defence is the sole cause of any unfavorable reflection that may be east on them or on him.
I have thought it right to fully examine all the evidence of fraud. The view suggested by my brother Gwynne as to the substantial failure in the proof of the plea, and that lt was thus unnecessary to consider the replication, seems to be well founded.
The case, as presented at the trial, and in argument before us, was almost wholly on the effect of the replication.
Gwynne, J.-- The question turns upon the fifth plea, which, in short substance, is, that before loss the plaintiff and defendants by mutual consent cancelled and discharged the policy.
That the cancellation took place before loss is the essence and gist of the plea, and it is always so pleaded: Reid v. Hoskins, 6 E & B. 953; Bains v. Woodfall, 6 C. B. N.S. 657; for after loss arises the cause of action thus accrued can only be discharged by release or accord and satisfaction: Edwards v. Chapmam, 1 M. & W. 231; Goldham V. Ewards, 1 M & W. 231; Goldhan v. Edwards, 17 C B. 141
The plaintiff joins issue on the plea, and also replies that the cancellation was obtained by the fraud, covin, and misrepresentation of the defendants and their agents.
The plaintiff is entitled to retain his verdict, for by whatever inducement the plaintiff may have been procured to
consent to what is relied upon as a cancellation, and whether or not any representations were made to him by
which such consent was procured, the evidence is clear that what did take place occurred afler loss, and was therefore inoperative.
The plea being thus disproved, the plaintiff must be entitled to recover.
GALT, J., concurred.
NOTE ** ((a) See also Pane v. Fane, L. F. 20 Eq. 603. 66-VOL. XXV UP.
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