Chap. VI.]

OBSERVANCE OF CONTRACTS.

219

his knowledge ; and he is compellable to give a full account ofall such facts, with all their circumstances, without evasion orequivocation.” #

Again, the law of marine insurance is another branch of ourlaw, for which this superior perfection has been claimed. Butthe contract of insurance is formed upon principles peculiar toitself; and the common-law doctrine of sales, and the doctrine ofinsurance, are each perfectly consistent with the facts, and themutual understanding, which they respectively assume. In aninsurance contract, an unreserved disclosure of all the circum-stances is required by the nature of the case, and by the mutualunderstanding of the parties. This will be more fully illustratedby observing, that, in making an insurance contract, the insureris essentially passive , and is known to act, and professes to act,upon the information of the insured. In this kind of contract,the special facts, upon which the contingent chance is to becomputed, lie almost always in the knowledge of the insuredonly. The insurer trusts to his representation, and proceeds inthe confidence, that he does not withhold any circumstance with-in his knowledge. Even if the suppression happens throughmistake, and without any intention of fraud on the part of theinsured, the policy is void. The common law punishes only forintentional concealment of defects, or silence respecting them, incases in which information is not equally accessible to bothparties.

The standard of morals, too, set up for the commercial com-munity by the commercial law, is very high. “ It is one of thecardinal principles of commercial law, that all its affairs must beconducted with perfect good faith.'''’ Again, “ It is the aim ofall law to secure the observance of good faith in all transactions.The law is said to abhor fraud everywhere, in all its degrees ; —it requires of the suppliant for justice, in any form, that he shouldapproach its altars with clean hands. But, where the necessity forthe rule is the most pressing, and the temptations to evade it themost severe, the law, perhaps in compassion to human infirmity,employs the greatest vigilance, and exacts the most inviolate

Story’s Equity Jurisprudence, Yol. I. pp. 25- 30,