[370]*370The cause was argued at December term last, and held under advisement until this day. j
Tilghman C. J.
This case comes before us on exceptions filed by the defendant to the report of referees. The material exceptions are two. 1st. That the policy of insurance on which the action is founded, contains a warranty that the vessel insured was a British vessel, which warranty was not ¡complied with by the assured. 2d. That it was proved to the referees that the vessel was not seaworthy.
' The second exception may be easily disposed of. Seaworthiness was a matter of fact, on which the referees decided according to the best of their judgment, on the evidence ‘produced to them. It must be a very strong case indeed, which would induce the court to set-aside an award, because the referees had erred in matter of fact. Without entering into particulars, I do not think the fact by any means so clear, as to warrant the setting aside of the award on that ground.
The first exception involves matter of greater difficulty. The insurance was on “ the good British brig” called the John, and her freight, at and from the Havamia to Baltimore. At the foot of the policy was a memorandum as follows: “ declared to be against perils and dangers of the seas only, “ and to end on capture.” The premium was four per cent.
It was urged on the part of the defendant, that the expressions “ the good British brig,” amounted to a warranty, that the brig was a British registered vessel, properly documented to entitle her to all the privileges attached to such vessels. On the contrary it was contended, for the plaintiff, that this was not a wax-ranty, but a description. of the vessel,which-was sufficiently complied with by proving to the' refei-ees, that the brig belonged to a British subject; and the plaintiff’s counsel placed some reliance on the custom of putting the express warranties, intended to be made by the assured, in a written memorandum at the foot of the printed policy.
I do not think it very material whether the expression, “ British brig,” is to be called a description or a warranty; since it is allowed on all hands to contain an assertion, which' -the assured is bound to maintain. But it appears tp me most [371]*371proper to call it a warranty, as it is a fact, not altogether immaterial, averred by the assured, and inserted in the policy.' Whether it is in the body of the instrument, or in a memorandum at the bottom, can make no difference as to its being "a warranty or not. The material question is, what is the meaning of it?
The words, “ British brig,” may have several meanings. Strictly speaking, a vessel owned by a British subject is a British brig. Or, they may have a more extensive signification; a brig not only ■owned by a British subject, but having a British register, &c. In ascertaining the meaning, I think •it fair to resort to circumstances disclosed in other parts of the instrument. In that point of view, it is material, that the insurance was against perils of the sea only; so that it is not to be supposed, that the privileges attached to a registered vessel, entered into the contemplation of the parties, because those privileges could avail nothing against storms and tempests. And here it may be proper to take notice of the custom of the insurance officers, to insert at the foot of the policy, such matters as they think of sufficient importance to make the subject of a special warranty. These memorandums are generally expressed in plain terms, without regard to form;' and I cannot help conjecturing, that if the insurers had contemplated a British registered vessel, they would have had a note of it at the bottom, without trusting to the general expression, “ British brig,” in the descriptive part of the policy. Considering the whole of the instrument,' I am of opinion, that the expression “ British brig,” is to be understood, a brig owned by a British subject.
■ The next question-is, whether the warranty thus under-‘ stood, has been complied with. The referees say it was proved to their satisfaction, that the owner was a British subject. They have been examined, and given their reasons, with which I cannot say; that I am dissatisfied. Upon the whole therefore, my opinion is, that the defendant has not shewn sufficient cause for setting aside the award.
Yeates J.
After stating the facts and exceptions, pro? ^'ceeded as follows:
There is a material distinction between a warranty and a representation. A representation may be equitably and subr [372]*372stantially answered; but a warranty must be strictly complied with* N warranty in a policy of insurance is a condition or contingency; and unless that is performed, it is no contract. It is perfectly immaterial for what purpose a warranty is introduced; but being inserted, the contract does not exist unless it is literally complied with. De Hahn v. Hartley, 1 Term Rep. 345. Park
I agree'that the authorities cited fully shew, that if a warranty be written either straightly or transversely in the margin of the policy, it must be strictly followed, as much as if inserted in the body. But the question here recurs. Is this a warranty? What was the meaning and understanding of the contracting parties, when they made use of the expressions “ good British brigP” Does it appear that they intended thereby to designate or identify the brig, which was the subject of insurance, or that the insured should jvarrant her to be a British bottom duly registered, within the terms of the English navigation acts of 26 G. 3. c. 60. and 27 G. 3. c. 19., accompanied with all the documents required by those statutes?
These facts are established by the testimony of the' referees who were examined on the .argument. The premium offour per cent, paid to the company was no more than .the common sea risk; in the usual course of business of insurance, with which they had been much conversant, a greater premium would have been required^ if the vessel had not been known; and all the cargo was on freight. They further [373]*373testified, that the accustomed method, as well of the insurance corporations as of individual underwriters, is to insert all warranties at the foot of the policy.
I do not mean to assert that it is indispensably necessary J in this port, that a warranty shall be placed at the bottom off the instrument, or that commercial usage shall control settled established law. All I contend for is, that a policy should' be construed according to the understanding of merchants, and observed with the purest good faith; and that in insurance cases in particular, mercantile usage must determine the precise meaning of the words. 1 Mars. 227. The inten-i tion of the parties, and not the literal meaning of the words/ is to be attended to in the construction of policies. Park 33. i 49. 1st ed. Their intention is if possible in the first instance to be collected intrinsically from all the expressions contained in the written instrument; but where that is silent as to the object of research, it may be fairly inferred from extrinsic circumstances, the perils intended to be guarded against, and the relative state of the vessel at the time. It is not expressed in this policy, whether the clause was introduced as a warranty or not; but it is of moment that the parties have declared, that the insurance was to be against the perils and dangers of the sea only, and to -end on capture. Whether the brig was really and bona fide a British bottom, and -duly f registered as such, or whether she was the property of a British subject, neither added to nor diminished the hazards-of the underwriters. In either case, her capture would depend on the same grounds and principles; and the risks to be run would be proportioned to the goodness of the vessel, and the nautical skill of the master and mariners on board. The premium of a sea risk is only demanded, on the voyage of a known vessel. But whence comes it, that the directors of the United States’ Insurance Company did not insert the words now relied on as a warranty, in the accustomed part of the policy, where warranties are introduced by‘the conymercial usage of Philadelphia.? It is not insisted that this is necessary in order to give those terms the effect and force of a warranty, if they were really intended to have had that operation; but it is a circumstance of no inconsiderable' weight as to the defendants, that by pretermitting their former habits, they have evinced their understanding of the [374]*374contract, as not amounting in this particular to a warranty. The natural, plain and obvious meaning of the adjective British, points to the quality of the subject of insurance, and serves as an adjunct for the purpose of identification, not material to the risk insured against.
I am by no means satisfied that this clause imports a warranty on the part of the insured; and the strong inclination of my mind is, that it is answered by proof that a British subject was owner of the brig. The referees were fully satisfied that Robert Mackie owned her, and that he was a subject of Great Britain, born in Scotland, from his broad Scots dialect, which could not well be mistaken, his intimate knowledge of the local state of that kingdom, and his letter of introduction as a Scotsman to his countryman. This was strong presumptive proof of the domicil of the party for Whose use the policy was subscribed, and it lay on the underwriters to repel it by other proof. It appeared also, that when the vessel was shipwrecked, she had on board a British licence and clearance. The referees thought, that the evidence fully ascertained the truth of the words in the policy, that she was a “ British brig,” in their sense of the expressions.
As fo seaworthiness, there is no doubt that every vessel insured must, at the time of the insurance, be able to perform the voyage, unless some external accident should happen, otherwise the underwriters are discharged from their responsibility. But here no proof has been given of any latent defect in the brig, known or unknown to the insured. Considerable repairs were made upon her before the voyage began. Several masters of ships embarked on board of her, shewing thereby their strong sense of her seaworthiness; and her being thrown on a ridge of rocks, fully accounts for her loss. Of this the referees were the competent judges as a matter of fact, and they have expressed their entire satisfaction that the brig was seaworthy, before she sailed the second time from the Havanna.
Upon the whole, I do not think that these referees, who have for some years past been actively engaged in the busi’ness of insurance, have erred in such a manner either in law or fact, as should induce the court to interpose, and ans therefore of opinion that the report should be confirmed.
[375]*375Brac'kenridge J.
In applying my mind to consider this report, I am led to examine to what extent, under the head of approving a report, the court will inquire into the ground of fact, or law, on which the report has been made. For, though I have become reconciled to the extent to which, in practice, the courts have gone, in examining reports of referees, yet I never have been satisfied, and am not now satisfied, with the principles, which have been laid down, in governing that practice. For these would seem to warrant a practice beyond what has been exercised. The decision in Williams v. Craig, 1 Dall. 314, made a considerable noise in this state at the time it was dr-ítermined; and I will acknowledge, that, notwithstanding my high respect for the legal abilities of thejthen Chief Justice, I could not perfectly acquiesce in the whole extent of the principles laid down by him on that occasion: viz. “that the same cause which would “ induce us to set aside a verdict, and grant a new trial, “ should be sufficient for vacating an award. In theorie case “ the decision is made by twelve men upon oath, with all “ the information which the judges and learned counsel can “ communicate. In the other, it is the act of persons, who “ are not sworn to the faithful discharge of their duty, and “ who are unassisted, either in ascertaining the law, or, in “ developing the fact, upon which the question submitted to “ them may depend; which abundantly shews, that the “ sacredness' of awards ought not to be extended beyond “ that of verdicts, and must justify the court in puttingthem “ upon the same footing, when errors are suggested either in “ clear points of law or fact.
To this doctrine I can by no means subscribe; for, it is the c.ourt, or some one, or more of them, before whom the cause was tried, that are to judge on a motion for a new trial, whether the verdict is against evidence; whereas in examining a report of referees, the facts of the case are out of the knowledge of the court, or any of them; and this forms a reason why the court cannot, with so much advantage., examine a report of referees, in order to approve, and why the court cannot go so minutely into the evidence, in the case of a report, as in the case of a verdict.
But it has been said by the Chief Justice, in the case to ‘which we have referred, that our act of assembly of 1705, fe [376]*376to be considered “ as introducing another species of awards “ than those known' in England. This act provides, that “ wherfe the plaintiff and defendant consent to a rule of court u for referring to certain persons mutually chosen &c. the “ award &c. being made according to the submission of the “ parties, and approved of by the court &c., shall have the “ same effect, and be as available in law, as a verdict of “ twelve men.”
This act may have had a reference to the laws agreed upon in England some years before, by which it was provided, “ that all trials shall be by twelve men;” and which provision might be supposed to excí de the settlement of controversies by referees; and, it might be necessary therefore, to give the courts power, under rules of court, to refer matters and give judgment on awards, as on the verdict of twelve men. But it is sufficient to account for the provision, that it became necessary, or was at least salutary, in order to give effect to an award; and it is in this view of the case that I consider it as departing from the law of England; not as introducing a new species of awards, but as giving a new remedy on azvards; that is, giving them to be considered as a verdict, in order to support a judgment and execution. For before such provision, the remedy could be, but by an action on the award, or an attachment from the court.
It never could be meant to narrow the effect of a report, by giving it the force of a verdict; and it would be narrowing it, to restrain the province of referees to that of a jury in giving a verdict. On the contrary, I take it, no change is made in the law of England in this particular; but the superintendence of our courts over a report remains precisely the same as under the jurisprudence of that country; taking the superintendence of the courts of law, and that of chancery together. For under the head of approving, there being no court of chancery with us, our courts are warranted by that act, in going the same lengths, as the courts of law, and courts of chancery in England. And I take it this was the view of this act, and the reason of the provision, the approving by the court. When we have ascertained therefore how far a court of law, and court of chancery will go, in examining into the grounds of a report, we shall have precedent to guide us, in considering what shall justify the setting aside [377]*377a report here. For passing over the setting aside a report for misbehaviour of the parties or referees, or from what'ap-" pears upon the face of the report, which have been always grounds of setting aside even in courts of law, under the head of approving we undertake to inquire into the grounds of the report, not as we consider ourselves bound to do in the case of a verdict, but as done in the court of Chancery in England. The extent is laid down in that case to which I have alluded, viz. that “ in the! case of a clear error inpoint “ of law, or fact, the court will interfered This language has never been to me perfectly satisfactory. What application is there ever made to set aside a reference, where it is not insisted on the one side, that the error is plain, and, on the other, that there is no error at all. But the language of the Court of Chancery is not in these unqualified terms. That court is delicate in calling on referees to lay before the court the reasons and grounds of their award. “ A bill will “ not lie to compel the arbitrator to discover the grounds on “ which he made his award,” and for this I refer to Kyd on Awards under this head. “ It is unreasonable that he should “ be put to so much trouble and expense. If there be any “ palpable mistake made by the arbitrator, or a miscalcula- “ tion in an account that had been laid before him, the party “ aggrieved may bring his bill against the party in whose “ favour the award is made, to have it rectified.” Kyd on Awards 332, “ A material mistake in point of fact, an erro- “ neous statement of an account, even a plain mistake in “ point of law, coupled with other circumstances, are grounds “ for an examination in a court of equity, from the result of “ which the award may be partially affected, in a greater or a “ less degree, and sometimes wholly set aside. Thus, though “ a court of equity, where the only object of the bill is to set •“ aside an award, will not permit the plaintiff to discuss “ legal objections to it, but will confine him to thpse for par- ££ tiality and corruption, yet, if the bill, beside praying to “ set aside the award, pray also for an account, he will be “ permitted to make legal objections, in order to let in such “ an account. If indeed the arbitrators appear to be mistaken “ in a doubtful point of law, the award may be permitted to “ stand, though the court after great deliberation, should be *£ of a different opinion. And, in a late case, where no law- [378]*378“ yer could doubt upon the point of law, this distinction “ was laid down by the court of King’s Bench; that where “ the arbitrators, meaning to follow the law in their deter» “ mination, happen to mistake it, this is a good reason for set- “ ting aside their award, so far as it is affected by that mis- “ take.- But where, knowing what the law is, or laying it “ intirely out of their consideration, they make what they “ conceive, under all the circumstances of the case, to be an “ equitable decision, it is no objection to the award, that in “ some particular point it is manifestly against law.” Kyd. on Awards 350. For this reason the award was confirmed, although 'he arbitrators stated “ that they did not conceive “ they were awarding on the point according to any fixed. u rules of law, but doing what appeared to them, under all the “ circumstances of the case, strict and impartial justice.” Kyd 354. In the case of the South Sea Company v. Bumstead, Lord Talbot said that “ arbitrators were in the nature of judges, and “ in some respects had a greater latitude, not being confined “ within the rules of a court of law, or equity; and therefore “ might make such allowance, as could not be admitted in a- “ court of judicature.” Kyd 356. From these citations, which have been made by the author of this tract, and which I have made from him, it will be remarked that the language of the Court of Chancery, in the superintendence which it exercises in the examination of reports of referees, is that of an evident mistake of the referees. It is not error, which is a' term in legal language that embraces more. For that, in strictness of legal acceptation, may be error in point of law, which is not mistake, as is laid down in the late decision to which he refers. For a great advantage of a reference oftentimes is, to escape the application of a general rule to the particular case; whether on the ground of admitting evidence of the fact, or, in applying the law to the fact.. It would seem to be in a great measure, a matter of discretion, and with much greater latitude than in granting a new trial in case of a verdict, where and to what extent a court will interfere in setting aside the report of referees.
In the case before us, is there a warranty, that the brig-insured was a British brig?
There is an express, and an implied warranty; in other words, a warranty in deed, and a warranty in law. A war[379]*379ranty in law must be wholly a matter of law, because it is the law that raises it. A warranty in deed, or de facto, cannot be matter of law, unless where words are used to which the law has affixed, by decisions, a legal meaning, so that it ceases to be a matter of construction, whether within the intention of the parties, a warranty exists. Now, it does not seem to me that decisions have been produced só perfectly in point, and of such direct bearing, as to have fixed the construction of the words §o used, so as to preclude all consideration of intention. On the contrary, I think it remains; clearly .a matter of construction depending on intention; and that the meaning, and extent of the terms, is to be collected from all parts of the policy taken together, and even from extrinsic circumstances, And, I take it, evidence of the usage of such terms is admissible in explanation of the extent of them. The manner in which the words are intro» duced, strikes me as indicative of the laying too little stress upon them by the parties, to construe them a warranty. It cannot reasonably be supposed, and ought not to be supposed, that the insurer, expecting a warranty of such extent, would rest satisfied with having it so loosely and uncertainly expressed. It is his own fault not to have had it clear of all . ambiguity; and on the principle that the instrument shall be construed most favourably for the assured, in a doubtful case, and to me this is at least doubtful, I incline for the assured.
Nor is it clear to me that these words can be construed even a representation. On the contrary, it seems to be a case where as much may be said, and perhaps, with as much appearance of good reason, on the one side as the other. If a representation, whether it be material, or otherwise, is a question not clear of all difficulty.; I do not think it was meant to be considered: as- material; otherwise we should have had it unequivocally expressed to be. Such looseness and uncertainty are not to be favoured. Let underwriters look to the instrument, which they sign; and if they expect a warranty in a case where the law will not imply it, let the stipulation be such that there can be no doubt about it. The circumstance of these words, the British brig, not being where a warranty is professed to be made as to other matters, but coupled merely with the designation of the vessel, and the name John, I incline to take it as the referees have [380]*380clone, to be matter of description merely; and in that cáse we are clear of all authorities and reasoning, on the subject of warranty or representation. I think the referees were justified in construing this instrument, from the juxta-position of the words, from the usage of introducing matter of description in that manner, not meaning to give it the effect of a warranty or a representation, and from the understanding of merchants. Be that as it may, I am not so dear in it that I will undertake, as at present advised, to say, that they were not justifiable in taking this latitude. That being the case, I will not meddle with the conclusion they have drawn, that it was not a warranty, or a representation. The circumstance of the risk insured against, weighs much; the perils of the sea. It does not necessarily force itself upon the mind, that the circumstance of British built was a consideration in -.the insurance, as lessening the risk; nor of being British owned. The possible contingencies of being in a better state, from being less liable to be suspected of having violated the embargo, and so, less likely to be questioned, and the continuance of the risk at sea less likely to be protracted, are remote considerations, which it does not.seem to me can be presumed to have been in the minds of the insurer, so as to have had in view the circumstance of being British, as a substantial part of the contract. If so, it became him to have had it more explicitly stated, and not to leave it to be inferred by implication. Were a direction to be given to a jury,, I. do not see that I could take it from them as a matter of fact, whether a warranty, or whether a matter of material representation, made a part of the contract in this case.. Much less, where it is a reference to merchants, and it may be fairly presumed, for the express purpose of having an investigation upon liberal principles, would I undertake to set aside what they have done.
The second exception appears to me to have a question of more substantial difficulty. in it. For laying out of the law, the circumstance of being condemned a short time before as unseazvorthy, inasmuch as it is, alleged, and the referees may have -been justified in concluding from what they had before them, that this was but to manage the procuring a sale, in order to acquire the denomination of a British vessel, yet, the springing a leak and two foot water in the hold immediately after sailing, is [381]*381evidence violently presumptive that the vessel was not seaworthy at the time of sailing; and, at which time, the policy' attached. Suppose it owing to the stowage, and first lading of even a new vessel, that a leak springs immediately, or in a very short time. Can that vessel be said to be seaworthy? It is strongly presumptive that she was not; and I do not see how a jury could get over it. But if just after weighing, she is discovered to be deficient, and is unloaded, and then repaired, is the insurer discharged? Sailing a short distance would not seem to make a substantial difference from just weighing, and setting sail; and yet if we admit that the policy may notwithstanding have attached, to what distance may we allow her to have sailed, and within what time may we consider her probation as continuing? It is possible that the referees in this case may have considered the first sailing, and the second, as one sailing; and I ana not clear that they may not have been justifiable in so considering it. It certainly would have been advisable to have given notice to the underwriters, that they might have had it in their power to say whether they would consider the policy as void, or as still existing. That not having been done, but taken for granted on the part of the assured, that it did continue, the strict consideration will be, whether the vessel was seaworthy at the first sailing; or whether the second sailing was all the same sailing, and to be considered as the first. Did it appear to me from the examination of the referees, that they had the point precisely under their consideration as to seaworthiness at the time of the first sailing, and had presumed that she was seaworthy, and passed upon the question, this being purely matter of fact, I certainly should not think myself justifiable in overthrowing their conclusion. But I am not clear that they did confine their views to this point precisely. At the same time I am not clear, that they ; were not justifiable in considering the vessel as still in port until she did put back; and that the policy may be considered as attaching at the time of the second sailing. There is a nicety in this which might deserve consideration. But I incline to think from examination of the referees, that they confined themselves to the state of the vessel at the time of the first sailing; and however difficult it might be for me to believe that -she could be in a seaworthy condition, vet I, [382]*382should not think myself bound to differ from them; and un^ess bound, .by a strong sense of the injustice done, I should not be disposed to do it.
Award confirmed;
Park 221. 1st ed.