and, as he is told that the cargo could only have been damaged from “bad stowage,” for which the vessel would be liable, he is willing to accommodate the parties with a protest, by which a little rough weather is magnified into a gale, and the damage to the coffee, which may have once before been paid for by the same underwriter, becomes, with the assistance of certificates from surveyors, the subject of a new claim. This practice has had a very injurious effect-as to insurance-upon the interests of honest houses, and it is peculiarly interesting that such frauds should be prevented and exposed. In some instances, where there was no insurance on the vessel, damages, which have accidentally happened, have been so fraudulently described as to bring them within the rules for general average, and insurers on cargo and freight have been made to bear, wrongfully, a large proportion of the repairs. In others, where the vessel and cargo belonged to the same owners, and sometimes where they did not, and accidental damage has happened to “memorandum articles,” for which no “particular average” could legally be claimed from the insurers, the whole has been, by fraudulent protests, and false log-books, brought into a general average, and contributed for by those who should have been exempt. In a recent case, damages happening on a voyage to Mobile, were made the subject of a protest at that port. She was not then insured, but a policy was procured in Boston, and the vessel left Mobile without repairs ;-before arriving at New York, some sails were blown and cut away, and on arrival, a protest was made in which it was stated that all the damage, including that received on the voyage to Mobile, had happened on her voyage from that port.

Surveys were called, the repairs were ordered, a statement of the claim for loss was made, when, by the merest accident, the Mobile protest was discovered in New York, and the whole fraud was exposed. Alterations and re-writings of log-books, to suit certain circumstances, or to bring a loss within the terms of a policy, are of too frequent occurrence to require more than a passing notice. Another species of claim, scarcely less culpable than some of the instances cited, is, where a vessel's copper being so nearly worn out as to require to be replaced by new, is purposely stranded upon some bar or shoal, whence a tide will be sure to float her, but not until the stopping or touching upon the ground has furnished an excuse for requiring new copper at the expense of the insurers. Sails, old and ragged, are sometimes set purposely to have them blown away, in order that underwriters may furnish the vessels with a new suit ; and, occasionally, when the wind will not blow with sufficient force to remove the vestiges which might betray the age of the sails, the axe and the knife will cut the tell-tale witnesses from the spars.

And as to small losses, not originating in, but turned to, fraud by bad acts, misrepresentations, and false oaths—their name is Legion! It would be an endless labor to detail all the cases which come readily to the knowledge of one who attends, personally, to the “out of door" business of examining and settling insurance claims. Some of them may be enumerated.

In cases, where damage to cargo has arisen from “bad stowage,” false surveys, showing sea damage, are often procured, to make the insurers pay the loss which should fall upon

the ship owner. False certificates of the sound value of a damaged cargo are procured, to increase the per centum of loss which would not otherwise reach the amount necessary to create a claim for particular average. Almost every case of repair for account of underwriters is attended with a fraudulent overcharge in the bills, as in such cases mechanics have no mercy. False bills of repairs are rendered to the insurers, where a fraudulent increase of fifty per cent. is made, so that when the one third “pew for old,” which should fall upon the owner, is deducted, the insurer will, after all, pay the full cost of the repair without the benefit of the deduction which the policy would warrant. A case of the kind was discovered, where, by accident, the honest and dishonest bills were placed in the hands of the same insurance broker to adjust the claim. The ship chandler's bills, which were most important, plainly proved, that one was made for the owner and the other for the insurers, $150 being charged for every $100 of cordage actually delivered. This was not the first or last case of the kind, although in the other instances more caution was used. There are persons in New York who do not scruple to propose this and other plans to ship-masters and owners, as an inducement to give them their business, and New York is not the only port. where this and similar practices are extant. An English ship carpenter at Cowes or Falmouth, can afford to give a ship-master a new chronometer, as well as a New Yorker can afford the bestowal of a large commission, or a suit of clothes ; and some ship-masters in high places, who have been highly respected for their sobriety and integrity, have not disdained to require and accept what honest men call a bribe, for the bestowal of “an underwriter's job,” but which polite and time-serving rogues will persist in calling a mere “perquisite. As an honest mechanic can afford no deduction from his bills, he will make none; and, although New York retains ship-masters who would scorn to receive, and mechanics who would not give, “a douceur,” it is nevertheless disgraceful, that neither of these classes succeed so well as those who are more in favor on account of their yielding character and easier consciences. It would be an advantageous labor for the underwriters to correct-by their own personal scrutiny—the evil in New York, before looking farther; the result would surprise them, and be beneficial to all but those who now confidently but secretly batten on the spoils.

Many captains, who have made demands against underwriters, have found that the difference of a few dollars in loss or expense will make or mar a claim for partial loss, which must, in all cases, amount to five per cent. upon the valuation ; for insurers seldom or never pay a loss falling short of five per cent., however nearly it may approximate to that amount. The captain or owner whose demand has thus been defeated once, provides for future cases ; the axe and the knife, profuse expenditure, or false bills, will augment the per centum to more than enough, for fear of mistakes in the calculation! In a recent case, the captain was detected in the act of injuring the rigging of his vessel, after his arrival in port, in order that he might not only have damage enough for a claim, but secure a supply of new rigging for the old. Complaints against underwriters have been made, that they encourage petty frauds of this character, by refusing to pay claims for partial loss which fall short of the necessary per centum by a trifling amount, which, as the assured say, is occasioned by the exercise of extreme economy. But the answer is, that the most strict and honest exercise of economy, in all cases, is but a just compliance with a kind of implied warranty to which

the assured binds himself by the acceptance of the policy; and, as the terms of the contract, in relation to partial losses, printed in the policy, are easily understood, there can be no hardship to an honest man, in ad. hering to them punctiliously; the rogue will surely complain, so that he may at least appear honest and indignant. A departure in one instance, “would be recorded as a precedent; and many an error, by the same example, will rush into” the business of adjusting claims, and so many difficulties would thus arise, that there might as well be no rules in existence; for, even with the best discretion and skill on the part of insurers, in the exercise of their duties under this part of the contract, they are too often compelled to pay for repairs, as indiscriminately, as if they had agreed to keep the vessel in complete order, under any and every

, circumstance. There are alterations required, most assuredly, as to parts of the practice of settling claims, which would operate more fairly and fully as an indemnity; and, when frauds are decreased, the insurers can well afford to make such changes, as they are, and should always be, inclined to maintain the character of the policy of insurance as a contract of perfect indemnity.

Policies by vessel or vessels have given rise to another species of fraud, which has been much practised. Open policies for twenty, fifty, or one hundred thousand dollars, are procured by persons receiving many consignments. The amount to be insured by any one vessel is limited; and it is agreed that the assured shall give immediate information to the insurers as to the shipment or receipt of the invoice, in order that the amount may be endorsed upon the policy. As the advice of shipment and the invoice very often arrive together, and as the goods are safe, the assured is too apt to forget to give the insurers notice to make the endorsement on the policy, and the premium of insurance is thus unjustly detained from them, whilst it is hardly probable that there is an instance on record where the assured forgot to make the endorsement and claim when the goods were lost or damaged. Claims for return premium are often falsely made under these contracts, but it oftener happens, that the assured continues to hold the policy rather than make an affidavit that all the goods actually received have been endorsed on the policy, and he will get such a privilege for an extension of time as will enable him to fill up the policy by such endorsements as are unavoidable. To increase the perplexing difficulties of this kind of insurance, the goods are often consigned “ to order," and though the insurers may, by the inspection of newspapers and freight lists, and by means of assistance from the customhouse, discover and endorse many of these stray risks, yet a vast number go clear, and pay no premium ; and, with the exercise of the greatest vigilance, the dishonest practice will continue until the underwriters adopt some harsh measure, or abolish the system entirely. The plan of issuing these policies commenced at a time when, as there was a greater competition, it was deemed necessary by some underwriters, to offer increased accommodations to the assured ; and what was once a mere convenience, or inducement held out to get premiums, has now become so strongly engrafted upon the business of insurance as to be almost immoveable, although there are many serious objections besides that of the fraud to which it has given rise. Such policies are decreasing, and will continue to be less often granted, until the old system be restored: the sooner the better.

The last of the frauds to be described, are those by which underwriters suffer from the plundering wreckers upon our coast. They are committed less often than in former times, when magistrates and preachers did not disdain to insist on having a fair chance with their less potent brethren. It is by no means probable that the inhabitants of our sea-board ever contrived to cause the loss of life with a view to plunder; but, it is confidently believed, that they have caused losses of vessels by false lights, etc., although no instance has been clearly proved. These wreckers, luckily, do not harbor the superstitious fears as to saving life from wrecks, attributed by Sir Walter Scott to their less fortunate brethren on the coast of Zetland; for, we have innumerable instances of the hardi. hood of our “ Jerseymen” and others in saving life under the most peril. ous circumstances. But, as to stealing, too many of them exceed in rapacity the most zealous of the Zetland tribe, who, as Scott says, looked upon the wreck as a “ godsend,” and as a mark of “especial favor from on high; which favor would not be repeated if the old and helpless were not charitably assisted to a fair share." Men and women owning property, and who would scorn to steal even a rusty nail from a neighbor, have had neither conscience nor fear as to robbing wrecks which were cast upon their coast; to rob a dead body was, with them, no crime. For some years past these piracies have been less frequent; and it depends upon the underwriters themselves, whether they shall be again committed with that impunity, which allowed of the stealing of at least $20,000 worth of goods from one ship, within sixty miles of New York, without a single arrest. On the coast of North Carolina, the pirates generally steal as much as they please. Nothing will prevent the recurrence of these bold thefts, but the prompt arrest and punishment of every thief, at any sacrifice or hazard ; and there are good men and good laws upon our coast, to insure the execution of justice, if their aid be required. As an auxiliary to the prevention of theft, the wreckers should be well and even liberally paid for every service. A parsimonious doling out of a miserable pittance to workmen will always be, as it has in some recent cases been, the cause of great dissatisfaction, so that honest men will not work, and some of the worst class of men will be hired in their places, and there will be more stolen from the wrecks than would be necessary to pay the honest men for their labor ten fold. There never was and never will be any real saving by such a course at a wreck. Underwriters would know this better, if they would occasionally surprise themselves by a visit to the sea coast af. ter their agents have returned and made their reports.

The policy of insurance, which now makes the underwriter, liable for barratry of the master and mariners, should be so amended as to cover only the innocent shipper of cargo in case of loss by fraud. The Boston policies have for a long time covered “barratry of the master and mariners, unless the assured be the owner of the vessel.” In New York, the owner of a vessel and cargo may contrive with his captain for a fraudulent loss, and although the fraud may be discovered, the insurers, under the risk of barratry, would be made to pay, unless his collusion with the captain could be proved. The effect of the Boston policy is, to keep the owner up to his liability in the selection of an honest captain, for against the acts of a rogue he cannot be indemnified.

As to the prevention of petty frauds : perhaps a clause might be introduced into the policy, which would vitiate every claim, however honest in part, if it were clearly proven that any portion, be it even the merest trifle, were founded in a wilful fraud. A provision of this kind exists in fire policies, and in many instances has proved very effective. And as to the prevention and detection of frauds in general, great assistance might be derived from an interchange, with every Board of Underwriters, of a list of all the frauds, large and small, attempted or known of by each company, and reported twice a month to the head-quarters to be agreed upon ; it being understood that an alliance should be formed, forbidding the issuing of a policy to any individual who may be clearly proved guilty of a fraud. The expense of such an arrangement would be a trifle ; for as it is, every company has to guard itself, and there is but little difficulty in perpetrating any fraud which may be designed. But the best of all means to prevent fraud is the unceasing exercise of vigilance-vigilance among underwriters ; and, among honest merchants, vigilance! Without vigilance, every plan must fail! And be it understood, that the frauds of the rogues are, for the future, apparently to be perpetrated in good vessels ; old vessels are too much suspected; and, although many of the heaviest of the honest losses which have fallen upon our underwriters have been by ships of the first class, there is little doubt that good ships will still be readily insured, and the frauds of the swindlers will be the more easily covered.

The statements herein offered are voluntary.—That they are true can be proved, if necessary. No solicitation, no cause, but a sense of duty, could have brought them forth. If any individual thinks he sees himself

, or his case, too closely described, let him go and sin no more; he will have nothing to fear. As the object was to confer a public benefit, not to inflict a private injury, so no malice should be inferred ; at all events, as no favor or affection should be sought from rogues, so their enmity should not be dreaded. And it is believed that there are too many concerned in the base practices of deceit, cheating, and imposition, collusion, misrepresentation, equivocation, concealment, bad faith, and perjury against insurers, for any person to imagine that he is specially alluded to; none will

, therefore, “ be offended, but those who are too conscious of their culpabil. ity: QUI CAPIT ILLE FACIT.'

Art. III.

SUGGESTIONS ON THE LAW OF AUCTIONS.

No. III.

ON AN AUCTIONEER'S RIGHT TO PURCHASE.

The reason why an agent for the purpose of selling, cannot generally become the purchaser, is obvious ; he cannot have a single eye to the interest of his principal. Courts of equity are disposed to adopt the principle of the civil law, that the same person cannot be both buyer and seller. When an ineffectual attempt at public sale has been made, the auctioneer may purchase from his employer the property he was engaged to sell, for his agency has terminated, but while his employment continues he cannot purchase, on the ground, that being invested with a tryst, he is disqualified VOL. II.-NO. IV.

40