CONCEALMENT,
contracts. The unlawful suppression of any fact or circumstance, by one
of the partis to a contract, from the other, which in justice ought to
be made known. 1 Bro. Ch. R. 420; 1 Fonbl. Eq. B. 1, c. 3, 4, note (n); 1
Story, Eq. Jur. 207.
2.
Fraud occurs when one person substantially misrepresents or conceals a
material fact peculiarly within his own knowledge, in consequence of
which a delusion exists; or uses a device naturally calculated to lull
the suspicions of a careful man, and induce him to forego inquiry into a
matter upon which the other party has information, although such
information be not exclusively within his reach. 2 Bl. Com. 451; 3 Id.
166; Sugd. Vend. 1 to 10; 1 Com. Contr. 38; 3 B. & C. 623; 5 D.
& R. 490; 2 Wheat. 183; 11 Id. 59; 1 Pet. Sup. C. R. 15, 16. The
party is not bound, however, to disclose patent defects. Sugd. Vend. 2.
3.
A distinction has been made between the concealment of latent defects
in real and personal property. For example, the concealment by an agent
that a nuisance existed in connexion with a house the owner had to hire,
did not render the lease void. 6 IV. & M. 358. 1 Smith, 400. The
rule with regard to personalty is different. 3 Camp. 508; 3 T. R. 759.
4.
In insurances, where fairness is so essential to, the contract, a
concealment which is only the effect of accident, negligence,
inadvertence, or mistake, if material, is equally fatal to the contract
as if it were intentional and fraudulent. 1 Bl. R. 594; 3 Burr. 1909.
The insured is required to disclose all the circumstances within his own
knowledge only, which increase the risk. He is not, however, bound to
disclose general circumstances which apply to all policies of a
particular description, notwithstanding they may greatly increase the
risk. Under this rule, it has been decided that a policy is void, which
was obtaineed by the concealment by the assured of the fact that he had
heard that a vessel like his was taken. 2 P. Wms. 170. And in a case
where the assured had information of "a violent storm" about eleven
hours after his vessel had sailed, and had stated only that "there had
been blowing weather and severe storms on the coast after the vessel had
sailed" but without any reference to the particular storm it was
decided that this was a concealment, which vitiated the policy. 2 Caines
R. 57. Vide 1 Marsh. Ins: 468; Park, Ins. 276; 14 East, R. 494; 1 John.
R. 522; 2 Cowen, 56; 1 Caines, 276; 3 Wash. C. C. Rep. 138; 2 Gallis.
353; 12 John. 128.
5.
Fraudulent concealment avoids the contract. See, generally, Verpl. on
Contr. passim; Bouv. Inst. Index, h. t.; Marsh. Ins. B. 1, c. 9; 1
Bell's Com. B. 2, pt. 3, c. 15 s. 3, 1; 1 M. & S. 517; 2 Marsh. R.
336.
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