Majority
p. 691Blagge against The New York Insurance Company.
Headnote
Property warranted to be neutral, must not only have every document necessary according to treaties and the law of nations to prove its neutrality, but it must not be accompanied with any papers that compromit its neutral character. Ifj under such a warranty on goods, the outward cargo appear to have produced less than the homeward has cost, the assured must, in a voyage from a belligerent country, show that the excess was derived from deutral funds.This was an action on an open policy of assurance, dated the 18th of May, 1799, at a premium of 10 per cent, for the sum of 20,000 dollars, on the cargo of the ship Flora, James Lovett, master, at and from Carthagena, or any other port on the Spanish Main, to Hew York. The instrument contained the usual clause against illicit trade, and at the bottom the following memorandum was written.
“ Warranted American property, proof of which, if required, to be made in Hew York, risk of seizure or detention in port excepted.”
Bisk of seizure, &c. was in a separate line, but there was not any stop between the words.
From the ease made, it appeared the master of the Flora was formerly a joint owner with the plaintiff in a schooner called the Betsey, and had, in February, 1798, sailed in her to La Güira with a cargo in which they were mutually interested; that on his arrival there the market was overstocked, and, hearing that the port of Carthagena was opened for the admission of neutrals, he proceeded to that . place, off which he got on shore. His information proving untrue, he was, on being carried into the harbor, seized
p. 692
and condemned for approaching the coast with a design to trade contrary to law. After a very considerable time, he, on an appeal to the viceroy, obtained a reversal of the sentence, and an order for restitution. During his stay, he became acquainted with one Thomas Andrew Thorres, who proposed to him a system of commercial intercourse, for the purpose of introducing into Carthagena, in American bottoms, goods from the United States under the sanction of the royal order of His Most Catholic Majesty of the 17th Hovember, 1797. [*550] *To accomplish this, it was not necessary that the articles should appear to be Spanish property ; and to eifect this, it was agreed that they should be consigned to Thorres as his own property, shipped for him by Blagge, his agent in Hew York, and that Thorres should have one fourth of the net proceeds for lending his name in the transaction.
In consequence of this, and the advantage which the speculation held out, Blagge, in April, 1799, sent, on his own account, a cargo amounting to near 70,000 dollars, by the ship Flora, to Carthagena, where she arrived about the 6th of May following. She there disposed of her cargo for 120,000 dollars, and in part return took in cotton, fustic, 21 ingots of gold, and 3,500 milled doubloons, to the value of 85,000 dollars in the whole, leaving, to pay duties and be collected, the remainder of the sales, in Thorre’s hands, and outstanding debts. Being thus loaded, she set sail with a clearance for Cadiz, stating her loading to consist only of the cotton and fustic, on the risk and account of Don Emanuel Grarcia del Bio, and also with a clearance for Hew York, but granted by another officer, without specifying on whose risk the cargo was shipped. In neither the one nor the other was any mention made ot the ingots or doubloons; though Lovett signed, in Carthagena, bills of lading to the supercargo, for delivering both in Hew York; and for landing the cotton and fustic in Spain, Thorres gave a bond in a very considerable penalty
p. 693
which could only be cancelled by production of a certificate of- its having been duly discharged in some European Spanish port, or on proving, by evidence, that the vessel had been captured and condemned in some British.
After the Flora left Oarthagena, the master, as appeared from his depositions, made out an account of the sales of the outward cargo, which he stated at 55,000 dollars, and an invoice of the homeward cargo,' which exactly balanced that sum, totally omitting any statement of the bullion or coin on board. Thus circumstanced, the Flora had proceeded on her voyage something within the cape of Florida, when she was captured by a British ship of war. On being boarded, the master showed only his fictitious invoice, clearance, and other papers for New York, excepting *the bill of lading for the ingots [*551] and doubloons. On being questioned whether he had any other cargo than that mentioned in the fictitious invoice, or any other papers tho,n those relating to the New York destination, to both he answered repeatedly in the negative. On a strict search, however, the captors found secreted on the person of Lovett, and in the vessel, the clearance for Cadiz, declarations of Thorres that the property belonged to Don Emanuel Garcia del Bio, the custom-house bond for landing the cargo in Cadiz, and several letters giving directions how to cover the shipments and returns, so as to avoid the effect of the royal order of 17th November, 1797, and also one to the plaintiff from Lovett, written immediately after his arrival at Oarthagena, in which he said, “ he had delivered the cargo to the owner.” The captors having also discovered the bullion and doubloons, carried the Flora into Jamaica, where she was duly libelled in the court of vice-admiralty. In the answers on oath of Lovett and Paschal N. Blagge, to the standing and other interrogatories exhibited to them they swore positively that the outward and homeward cargo (excepting a few adventures of themselves and one Drake, who had been supercargo in the voyage to Cartha
p. 694The goods on which the present insurance was made, contain the usual warranty against illicit trade, and are also warranted American property. If, then, from any circumstances of trade, or breach of neutral conduct, the capture was j usti*
gena) were the whole, sole and exclusive property of the plaintiff, a citizen of the United States; that the appearance of its being Spanish was entirely fictitious, but indispensably necessary to its introduction into Carthagena under the royal order of 1797 ; for had any other name than that of a Spaniard been seen, the whole cargo would have been confiscated. That the clearance for Cadiz, or some other Spanish port, and’ custom-house bond to land the articles, were the only means of clearing out, but that he (Lovett) understood a simple letter from him, stating his capture, would have been sufficient to cancel the bond, and that the reason why the bullion and doubloons did not appear in the papers granted at Carthagena was, because the exportation of bullion and specie from the Spanish colonies is prohibited, the whole on board having been smuggled into the ship by himself and Paschal JST. Blagge, at the risk of imprisonment for their lives if discovered. That they were not mentioned in the invoice of [*552] the cargo, from an *apprehension lest the knowledge of so much treasure on board should excite the known cupidity of the British crusiers, and be a certain inducement to capture, but that the whole was the exclusive property of the plaintiff, Thorres never having had any interest in the articles, was merely allowed a fourth of the net proceeds for lending his name to intro-, duce the cargo under the royal order of 1797. The cargo, however, being condemned “ as good and lawful prize,” the present suit was brought against the defendants, for the amount of their subscription, and the jury having found for the plaintiff, a motion was now made to sot it aside and grant a new trial, the verdict being against evidence.
Hoffman and Hamilton, for the.- defendants.
p. 695fiable, the underwriter must necessarily be discharged. It is important to observe that the abandonment was on the capture and not on the condemnation for the abandonment was on the 1st of October, 1799, and the condemnation not till the 17th of the same month. Whatever, then, was the state of the assured’s right at that period, must govern the decision of this day. The question, then, will be whether, from the circumstances of the case, there was probable cause of capture; for that is the point, however the condemnation may be, though from the words of the sentence “ good and lawful prize,” it is manifest the sentence proceeded on the ground that Thorres was interested with Blagge. On warranties of property the rule of law is, that the warranty is not only affirmative that the property shall be such as it is said to be, and have all documents and papers necessary to protect it by evincing its neutrality, but it is also negative that there shall be no papers tending to a contrary conclusion. 1 Marsh, on Ins. 817 — 319; Rich v. Parker, 7 D. & E. 705. So that though, a vessel may be furnished with every document to establish her neutral character, yet if others tending to a contrary conclusion be found, the warranty of neutrality is not complied with.[10] It is necessary, therefore that a neutral ^should, [*553] during the voyage, act with the most perfect good faith towards belligerants; to do this, he should show the whole of his papers, which ought to be strictly genuine; none false or fictitious, and if any should be so, they ought to be candidly produced, and the reasons faithfully related. If the invoice of the cargo be fictitious, if there be any concealment of papers, allowing even that the circumstances should be afterwards explained, they justify carrying in, and, at least, subject to further proof. It is immaterial to the underwriter whether the explanation given be received as an excuse to avoid condemnation or not; as
p. 696between him and the underwriter it is a forfeiture of neutrality, and the insurer is exonerated by the mala fides of the insured, though between him and the captor it may be only a matter of further proof. The consequences, however, as they arise from the conduct of the assured, are wholly at his risk. Having made these preliminary observations, it will be easy to show the negative of the rule that has been laid down was broken, and accomplished to evince that the affirmative had not been complied with. First, then, as to the negative, that there were papers leading to a suspicion of the want of neutrality. This is evident from the affidavit of Lovett himself; he swears that he made out a fictitious invoice and account of sales. These are his words: “Well knowing the depredations heretofore made by British cruisers upon American property, where the same appeared valuable, and particularly so If in specie or bullion, this deponent was induced, from what appeared to him prudential considerations, to make a fictitious invoice of the cargo of the said ship Flora out from Hew York, and an account of sales the same in Carthagena, also an invoice and bill of lading of her cargo from Garthagena to Hew York, whereby it would appear that the same was only cotton and fustic, in order, that if she was boarded by a British cruiser, he might be permitted to proceed on his voyage more readily than if his cargo was fully exposed to view.” It was not till after repeated denials of any other cargo, not till affirmations over and over, that there was no other cargo than the cotton and fustic on board, that the real invoice, and the several clearances were delivered up; and even then not [*554] «till the bullion and specie were discovered. These two articles were totally omitted in the invoice exhibited to the captors at the time of boarding the Flora. This alone was enough to authorize the detention of the vessel, nor is any attempt made at an explanation till the vessel is under libel in the court of admiralty. With what degree of credit that explanation could be re
p. 697ceived is worthy of observation. There is a bill of lading in which Lovett acknowledges the cargo to be shipped by Thorres on account and risk of Don Emanuel Grarcia del Bio, of Cadiz; and though it may be said that a clearance to a Spanish port was necessary, still the manner in which the letter of advice mentioning the shipment is worded, does not tend to remove the impression of its being Spanish property, and the place of destination used merely as a blind. In that letter she is said to sail properly registered for Cadiz, “ or any other port which .might “ be to her advantage to avoid any risk arising from the enemy.” If then, any other port was open to her, it is to be hoped no stress will be laid on the circumstance of her being in the track or route for New York. Spanish property may as well be sent to New York as to Cadiz. Allowing, however, this to be no more than a conjecture which a court of admiralty might make, it is impossible to get over the custom-house bond[10] given to land the cargo in Old Spain, and pay the duties. Is not this such a paper as the vessel ought not to have had ? And let it be remarked that no explanation of this and the other papers evincing Spanish property, was given to the commander of the British frigate at the time of the capture. All that have been enumerated were found concealed, denied and persisted in. After the delivery of the fictitious papers, others were asked for and denied; a search took place, and they were, found. Have you any other cargo than cotton and fustic was demanded ? None was the answer. In a moment after the bullion and doubloons were discovered. Was not this having and doing every thing a neuter ought not to have had and
p. 698done ? Under all the circumstances of the case, can any one say the condemnation was not well warranted ? For who would believe the explanations of the man [*555] whose whole tenor of conduct had shown *him unworthy of credit? The court of admiralty would naturally consider whether the explanations were consistent with the circumstances, and the former declarations of the parties. Allowing it problematic whether Thorres was the whole and sole owner, no court nor jury on earth but what would be justified in saying Thorres was interested with Blagge. But when the papers are examined, (and this court is not confined to the sentence,) it will be seen that Thorres was the actual proprietor. In a letter, written by Drake, the supercargo of the outward voyage, the confidential friend of the plaintiff, and dated-a few days after the arrival of the vessel, he says, “ The day after we entered the vessel we began to unload her, and deliver the goods to the owner, who, at the end of eight days, disposed of the whole.” Who could this owner be but Thorres, to whom the goods were addressed. We are aware of the explanation given by Lovett and Drake of the arrangement made at Oarthagena, that the property should be shipped in the name of Thorres. This, for eluding the revenue laws, might be necessary, but why continue the deception to Blagge himself? Is it not rather to be supposed that the truth came out ? Every one must think so,' and no doubt can be entertained of this letter, which certainly was not a document to prove neutral property, having influenced in its condemnation. That this was a just and proper conclusion, is manifest from the letter of Thorres to Don Emanuel Garcia del Bio. The consignment of the‘vessel from Blagge on- Bio’s account is fully set forth, and the account of return cargo, agreeing with the actual quantity of cotton and fustic, is mentioned. This letter is instantly followed by one from some Spaniards of the names of Matteo Arrage and Juan de Francisco Martin, to a Don Charles Frazer, of Hew York, whom
p. 699we have never yet discovered, and to this succeed several letters pointing out the whole system of covering, by transmitting forms of invoices, &c. &c. to cloak the property. It is remarkable that this letter is dated the 5lh of June, 1797, and speaks of the order of the November afterwards. This, too, was one of the secreted- papers, and evidently is meant for purposes which do not meet the eye. At all events, it is one of those negative *papers [*556] which a neuter ought not to have. If the court will for one instant advert to thesecurityship of Thorres, and consider the amount to which it extends, they will naturally say it is impossible that it should be entered into by any person not absolutely a partner in the concern. It was to be can-celled in a manner that proves Spanish interest. Either by a certificate that the articles was landed in Spain, or by proof of a capture and condemnation in an English court. How could such papers be procured ? The very idea of their being to be brought forward, if the facts of capture and condemnation did not exist, leaves a most unfavorable impression on the means that must have been adopted. But it is not from inferences and reasonings that we are obliged to prove this was not American property. There is a written document, preserved on the declaration of Lovett himself, that the property is Spanish. In the clearance for Cadiz it is expressly so stated; and that is an official paper deserving full faith and credit. If the invoice be attended to, it is equally a suspicious paper. The amount of the sales of the cargo out are stated to be 55,000 dollars; the cotton and'fustic, it is true, balance this; but from whence have the 80,000 dollars in ingots and specie arisen ? Blagge had no funds in Carthagena; and his outward cargo is by the invoice stated to be only 55,000. These circumstances show such a mixture of interests between Blagge and Thorres, that the court of admiralty, unable to discriminate the portions, justly condemned the whole partnership concern. That this was the principle on which the admiralty proceeded is manifest, for they
p. 700'condemned what was claimed for Blagge, but acquitted Lovett’s and Drake’s proportion. The invoice in cyphers, however the character might have been explained, was unnecessary and dangerous paper. It is said, to be sure, to have been made for the amusement of the supercargo; but it served to throw a further air of mystery over a transaction already sufficiently mysterious. It is curious to observe the reason assigned for the taking out a clearance for Spain: That it was impossible to obtain one for any other place; and yet there is on board the Flora another clearance directly for Hew York, and both obtained [*557] from the same office. It is true *Lovett’s deposition says, he does not know whether they were signed by the same officers. But that is immaterial; they establish the possibility of having a clearance for Hew York, and from the custom-house too. This, then, contradicts the pretence of necessity. From the case it appears, that on the trial “ it was admitted, that all trade between the American and Spanish colonies is generally prohibited, and that it is notorious that it is so; but that sometimes foreigners do obtain special license to trade with the Spanish colonies.” As, then, this trade without a license is prohibited, and the clause agaipst illicit trade is preserved in the warranty, “ seizure or detention in port only excepted,” it is plain the risk of illicit trado anywhere else was expressly at the hazard of the assured. If this be so, certainly the consequences of such trade was equally a peril he undertook himself to bear. It can never be contended that though the principal is not at the hazard of the underwriter, yet that he is chargeable for the incident or result. This doctrine would be against- the words of the policy, and against reason itself. It cannot be presumed, that under a warranty of American property, which imolies that the property shall be accompanied with all documents necessary to prove it American, the underwriter’s contemplated that it should have every paper to give it the appearance of Spanish. A risk not necessarily to be en
p. 701countered, is never to be imagined as included. The risk in port taken by the insurers would' have covered the consequences of smuggling the money: but as to any other risk from illicit trade it was expressly declined. Ho usage can, in the present case, be set up. It was the very first voyage. Therefore, none of the arguments to be derived from the Ostend case, Planche v. Fletcher, Doug. 238, can here apply. Allowing that the papers made use of were necessary for the voyage, yet, as it was a new trade, (see Kennoway v. Noble, Doug. 510, contra,) the warranty being against illicit commerce, it was incumbent on the plaintiff to acquaint the underwriters of the circumstance, because it undoubtedly increased the risk. On the principle of concealment, then, there cannot be a stronger case. In the case of Seton, Maitland & Co. there was not only a disclosure of the articles being contraband, but the very manner in which they would *be shipped was [*558] specified. But here nothing of this sort takes place, and the goods are at the usual premium for American property sent forward with all the risk attending Spanish. Independent of this, at the time of the capture, the assured being guilty of ill faith towards the belligerant, affords a justifiable cause of seizure and detention by the breach of neutrality committed, and thus exonerates the underwriter. It is no answer that the double papers and <oncealment of them was with a view to prevent being caried in: the fact is, that the reverse was induced, and though %lse papers, or even secreting them, may not lead to condemnation, yet, when these circumstances are mixed with alsehood, they warrant confiscation, and in the present case falsehood upon falsehood appears; denial after denial of papers and cargo, all of which on investigation arc found to be totally destitute of truth. It is evident, then the negative part of the warranty is broken throughout. Let us, then, advert to the affirmative — that there shall be every document to prove the neutrality. From Lovett’s own answer to the standing interrogatories it appears the
p. 702vessel had no sea brief. The effect of this paper is that oí a passport: and it is indispensable for a vessel to be furnished with it. Price v. Bell, 1 East, 663; Rich v. Parker, 7 D. & E. 705. That she had it not is evident from the admiralty proceedings, and the list of papers exhibited there. It may perhaps be contended, that as the treaty with France was abrogated, the doctrine in Price v. Bell, which was the case of an American vessel captured by a French privateer, and condemned for want of a passport, does not apply. It is not, however, only by the treaty wjth France that this document is required ; by those with Spain, Holland and Algiers,(a) it is equally necessary. The importance of the paper cannot be better evinced than by referring the court to the argument of Lord Kenyon, in Rich v. Parker, before cited. It is evident, therefore, either that the assured has not acted as he ought to have done; in consequence of which the vessel was carried in and condemned, and, therefore, the underwriter discharged, or that she was not properly documented, being destitute of a sea brief, or passport, a paper essential to the security of vessel and cargo. Under either of these posi[*559] tians *the inference must be the same, and a new trial, it is hoped, will be awarded. The court in its decision may look beyond the sentence, and into the other general proceedings. Bernardi v. Motteux, Doug. 575, the process verbal was received. . So in Colvert v. Bovil, 7 D. & E. the court adopted the same principle, and adverted to things clehorsi[8] the sentence. Whenever the master has been guilty of mala jides, even further proof is not allowed, nay, condemnation inevitably ensues. The case of the Welvaart, 1 Rob. Adm. Rep. 154, and that of the Vrouw,[9] in the same book, 194, fully establish this.
p. 703This is a voyage by an American merchant to Carthagena. It is unnecessary, therefore, to refer to the evidence before the court, to show that the nature of this trade, and the necessity of a Spanish name were well known, and notorious to all the world. No one is or was' ignorant that foreigners had been prohibited from commerce with the Spanish colonies, and that even their own subjects could not traffic from neutral countries, till after the order of the 17th November, 1797. Up to that period, the whole trade of the American dominions of Spain had been confined to Spaniards trading from Spain. In 1797, the order above mentioned made the relaxation alluded to; and, for -the sake of supplying their foreign territories, the Spaniards allowed importations from foreign countries. This will furnish a clew to a great part of this business, and show the construction we shall contend for to be right. As to the possibility of licenses, whether they exist or not is immaterial. The want of one was never made a part oí the defence. It is enough to advert to the nature of the trade, and if this was notorious, and could be carried on but'in the name of a Spaniard, then that it should be used, must be considered as intended by the assured, and taken as part of the contract by the assurer. That a license was never in contemplation is manifest from the exception at the foot of the policy: “ risk of seizure and detention in port excepted.” What, then, is the language of the policy ? We will not take this risk in port, because *we know the trade. Under a license it cannot be, for the license *would protect you there: under the royal [*560] order it is .equally impossible, because then a Spaniard could have no danger against which to wish an indemnity: but against a seizure in port an American would have to guard, because there alone could there be danger to him, and this we undertake. Therefore, granted that the usual clause of warranty against illicit trade is retained in the policy, this only stands in opposition to the clause at the bottom, and shows the nature of the trade
Harison, contra.
p. 704
known to be an attempt to evade the royal order of 1797. If this construction be right, then is the policy consistent throughout. No risk, say the underwriters, do we undertake from contraband trade, except when in port. All others are at your hazard, but as to the necessary means to cover the trade, that you, the assured, must use for our security, and as freely as you think fit. Therefore, want of good faith is not to be imputed to the plaintiff; all that he did being in the course of trade, equally within the view of himself and the underwriter. If, then, the vessel (departed from hence to avail itself of the order of 1797, the necessity of the property assuming a Spanish appearance must appear to the court, and this alone will unravel the whole proceedings. Lovett’s depositions in the admiralty show that it was necessary to clear out for Spain, nor does the clearance for New York convict him of a falsehood in this respect. It is requisite, for the carrying on the system of trade the plaintiff embarked in, that the vessel should be registered as having cleared' out for Cadiz, to enable him to protect his cargo against their own guarda costas, and still they may give him another clearance for New York, which never was entered in the registry of the custom house. This violation of principle is not according to moral duty we confess, but the transaction was with a Spanish custom-house, and it is evident that the two clearances were not by the same officer; so that the explanation given stands perfectly with the nature of the trade. That the money has not been included in the clearances is elucidated by the same means; by a reference to the commerce insured. The case states it; the exportation of coin and bullion are prohibited; to take them out of the country recourse is had to smuggling, in which, if dis-[*56I] covered, imprisonment *for life is the mild penalty of the law. How, then, could it be entered and cleared? The concealment, then, here so much cried out upon, arose from the nature of the trade, and was a measure to which the assured was necessarily reduced. This
p. 705•furnishes in part, an answer to the outcry of “ American property," “ warranted American property,” “ to be furnished with all documents to prove it American property,” “ and none to show it Spanish,” in short, to all that has been urged on the negative and affirmative doctrine of warranties. This appears more fully on viewing the memorandum at the foot of the instrument. Proof of property is by that to be made in New York. What can this mean but that the assured will not be concluded by any foreign determinations; that he reserves to a trial of his own countrymen the question of American property or not, and will not submit it to extra forensic tribunals ? Why is this to be so ? Because the transactions were to bear the semblance of Spanish interest, and the contrary could not in any place be so well shown as here, where all the property and business could be established ; where it was necessary only to show it actually American, however it might appear. In 2 "Val. 128, this position is acknowledged. There the trade was notoriously illicit, being of silk from Barcelona to France, yet, under similar circumstances as the present case, the underwriter was, on account of the notoriety, held liable. The concealment, therefore, here, is no more than a means of carrying on the trade. If this be correct, all the observations on concealment and documents are overthrown, for they are in the course of trade, and done for the benefit of the underwriter. It is true the court leaned to that idea in Goix v. Low, but the court of errors reversed that determination; and here it is to be observed, the nature of the trade demanded the papers made use of. They were obtained in the most perfect bonafides and can it be said that the contract is thereby destroyed ? Against the supposition of a joint interest between Blagge and Thorres, the depositions in the admiralty are full evidence. The same was testified here; so that the proof of property, under the policy, is complete. All this, however, is to be done away by ^circumstances [*562] which the nature of the transactions fully explain.
p. 706The clearance for Cadiz, and all the other documents giving a Spanish aspect to the business, are necessary proceedings to enable the plaintiff to avail himself of the royal order of 1797. The letters on the subject detail the methods to be adopted for that purpose, and though it is mentioned by Drake that the goods had been delivered to their “ owner,” it must be recollected it was possible that letter(«) might fall into Spanish hands on the coast. But whoever it might deceive, it could not deceive him to whom it was addressed. One, it is hoped, insuperable objection to all the arguments used, to evince Spanish property in the cargo is, that they are Brawn merely from circumstances, whereas the evidence of neutral property in the plaintiff is dei’ived from the most positive affidavits. The animadversion on the date of the letter is hardly worth answering. It could not, by design, have been dated in June, 1797, and speak of the order of November following; but if we make a rational supposition that, in copying the date, 1797 was, by mistake, inserted instead of 1799, the whole mystery vanishes. This seems very probable, for the letter came by a vessel which sailed in 1799. Neither is there any contradiction in Lovett's testimony as to concealment of papers; because, when examined under the standing interrogatories, they were all actually delivered up. Every measure adopted by the master of the vessel was clearly prudential; and therefore, if bona fide, must be protected. No argument can be drawn from the customhouse bond being entered into only for merely a fourth of the net-profits; for yfe have the same transaction here every day for only a commission. That sea brief and passport are synonymous terms may be doubted. 1 Marsh. 317 . But whether so or not is immaterial, for the vessel carried fully as authentic a document; she was commissioned as a letter of marque, and nothing stronger could be produced to substantiate her national character. That
p. 707this should have been communicated to the underwriter cannot be urged, because when a vessel is not designed to cruise, the being commissioned is settled[10] to be an immaterial fact. The objection, however, not being made at the trial, cannot ■ be heard. All indeed that has been said, ^relating to ships’ papers, is totally ir- [*563] relevant, as the warranty is only to the cargo and not to the ship. The whole case presents a statement of American property engaged in a trade notoriously to be carried on under Spanish appearances; and therefore, if the court see the warranty of property has been complied with from the general tenor of facts submitted, the verdict ought to stand. To its being so our objections are twofold: one, from the conduct of the master as the agent[8] of the plaintiff; the other, on account of the defect in complying with the warranty. His conduct is connected -with the question of warranty, because it is to be such as will not compromit the property. Therefore, if the conduct of the assured has that effect, it is a breach of the neutrality warranted. In Jackson v.-in this court, it was held that though the property warranted American, ivas actually so at the time of effecting the policy, yet as the assured bad, by a transfer,[9] altered the nature of the subject matter the warranty was not complied with. In the present case the misconduct was glaring. First, as to the false papers; secondly, in the behavior manifested at the time of capture. On the full .effect of the former, in cases like the present, there is no decision. But if it were held fatal, it would not perhaps, be too strong a conclusion. An underwriter ought to know how to calculate his risk: this
Hamilton, in reply.
p. 708is never to be done if the assured has it in his power to give any aspect he may think fit to the property insured. In another point of view it ought to be fatal: no court ought to consider that men will act on a principle of de ceiving any power whatsoever. Even policy will suggest this rule, for who can blame belligerants for intercepting our trade when they see it -has been directed in a continued course of deceptive commerce? On this, again, the books afford no authority; the only case is that of the Ostend[10] vessel, and there the court went on the notoriety of the trade; nothing but this will afford, a justificatory reason. The conduct adopted by the plaintiff’s agent gave to an American adventure all the danger of a belligerant risk, and this at only a premium for a neutral hazard ; this circumstance affords one of the indicia by which we [*564] are *to judge no species of illicit trade could be in the contemplation of the underwriters. The clause at the bottom of the policy does not contradict this position ; it is coupled with the proof of American property; there is no stop to disconnect them and, therefore, the court' must take them together, and not with a reference to the clause against illicit trade. In this sense, therefore, ' the exception is nothing more than that, in case of seizure or detention in ports, proof of American property shall not be demanded in Hew York. It is not as contended for, a disavowal of being bound by the opinion of other tribunals; if they are not conclusive they are to be looked into, and even all other documents on which the sentence has been framed: will not, then, the court look into the general conduct of the plaintiff’s agent, as it appears by the proceedings, and see if it does not amount to that of a breach of neutral conduct, which amounts to a breach of warranty, and, therefore, the verdict necessarily to be set aside Í
delivered the opinion of the court. The effect and fulfilment of the warranty of neutrality, are the points on which the controversy between these parties principally turns. A distinction is set up between this and a general warranty of neutrality on account of the qualification, as it is termed, contained in the stipulation that proof if required, is to be made in New York. The design of introducing this clause in policies is notorious. It was to steer clear of the doctrine of the conclusiveness of foreign sentences, and cannot affect the essence of the warranty. The obligation of that must remain the same wherever the proof of performance may be exhibited. A warranty of neutrality, in a policy of insurance, imports, not merely that the property is neutral, but that it shall be accompanied on the voyage with all the accustomed documents[1] to insure it respect as such, within the laws of nations. And, although the question has never, to my knowledge, been decided, the same principle will.require that it be unaccompanied with any document that shall compromit its •aeutral character. Where the assured, by means of false papers, or by any other improper conduct, invests the
(a) (a) To comply with a warranty of “neutral property," it must be accompanied with all papers and documents required by the treaties of the country to which it belongs necessary for its protection on the voyage insured. Baring v. Royal Ex. Ass. Co., 5 East, 99. If, therefore, a passport with the habitation of the captain be one, a passport with his name describing him as “master of the V. of A.” is a breach of the warranty. Baring v. Christie, 5 East, 398. But sailing with a sea letter, though without a register, if the vessel be otherwise sufficiently documented, is a compliance with the engagement. Barber V. Phoenix Ins. Co., 8 Johns. Rep. 307 . No paper which will increase the risk, or falsify the warranty, must be on board. A letter, therefore, in sympathetic ink, stating the property to be in others than the insured is a violation of it. Canere v. Union Ins. Co., Cond. Marsh. 406, a (note.) So is any act or omission of the assured, or his agent, by claiming falsely, or omitting to claim. Calbraith v. Gracie, Cond. Marsh. 406, b. (note.) But if there be’nta warranty of the national character of a ship, she need, not be documented as'of the country to whicli she belongs. Dawson v. Atty, 7 East, 367. For the law as to documenting applies only to express warranties, and does not extend to those by implication. Etting v. Scott & Seaman, 2 Johns. Rep. 157 .
p. 710
property with the double character of neutral [*565] and belligerant, *be his motives what they may, he subjects it to a risk against which the underwriter did not insure, and, of course, releases him from all responsibility. The assured stipulates, by his warranty, that the insurer shall be liable for a neutral risk alone. The instant, then, that he attempts to put him to the hazard of a belligerant risk, he forfeits, his claim to an indemnity. -Hor does the dictum cited from 2 Valin, if admitted in its broadest latitude, in the least shake this principle. For, although the underwriter may be bound to know the nature of a trade notoriously illicit, it does not follow that he is to be liable to the consequences of every ingenious device that may be resorted to as a cover for the property. But, were it otherwise, the doctrine of Valin would not apply to the case before us. The trade in which the Flora was engaged, was not notoriously illicit, for it is stated to have been sometimes permitted, at others prohibited. The underwriters appear to have intended to guard themselves against the consequences of an illicit trade, by excepting from the risk seizure or detention in port.
There is another circumstance in the present case which militates strongly against the plaintiff’s right to recover. It is a maxim that neutral commerce is to be conducted with good faith towards belligerants. Their rights are to be respected as well as those of neutral nations. It is not sufficient that a part only, but the whole property, covered by the policy, must be neutral. And if a cover is attempted for enemy's property, by an intermixture with neu • tral, it is held to subject the whole to confiscation. In the present instance it is stated that the homeward cargo was purchased with the proceeds of the outward. How the latter sold for 55,500 dollars, and the former cost 89,000 dollars. It was incumbent, then, on the assured to show that the excess was also American property. This might have been shown had the fact been so. It does not appear, however, that this was attempted. And, although
p. 711
it was a question submitted to the jury, I think we are bound to say that, as to this, their verdict was against evidence.
The court is of opinion that the verdict ought to be. set aside, and a new trial awarded.
.New trial.