78

An interesting case on this subject is the decision of Mr. Justice Story in ANDREWS v. ESSEX FIRE & MARINE INS. CO. There insurance had been effected on the cargo to proceed to Kingston, Jamaica, and, if not allowed to sell there, then to Cuba. It was known to both parties that the British government forbade American vessels carrying such cargoes there, but both parties thought that the prohibition might be removed by the time the vessel landed. The court held that the knowledge of the underwriters that the trade was illicit did not make them assume that risk, and that it was a risk not covered by the policy.

In Clark v. Protection Ins. Co.," which also was a decision of Mr. Justice Story, when the ship arrived at the port of New Orleans the master took on board a chain cable, which had been bought at his request in Nova Scotia, brought there on another ship, and smuggled on board his vessel. After this she sailed from the port of New Orleans, and was lost. The underwriters contended that this act vitiated the entire insurance. The court held, however, that, as the insurance was originally valid, any subsequent illegality in the voyage did not affect the insurance as to property not tainted with the illegality, although no recovery could be had for the special property which was so tainted.

In Craig v. United States Ins. Co.," an American during the war between the United States and England took out a British license. Mr. Justice Washington held that, as this was an illegal voyage throughout, there could be no remedy upon an insurance policy covering it.

Calbreath v. Gracy 73 involved a somewhat similar ques

78 3 Mason, 6, Fed. Cas. No. 374.

741 Story, 109, Fed. Cas. No. 2,832. Here the penalty of forfeiture imposed by the revenue law for smuggling was upon the vessel bringing the cable, not upon the vessel receiving it.

75 Fed. Cas. No. 3,340, Pet. C. C. 410.

761 Wash. C. C. 219, Fed. Cas. No. 2,296. See, also, Schwartz v.

tion, though the warranty in that case was express, and not implied. The warranty was of neutrality, the vessel and cargo being warranted as American, but during the voyage she was documented as Spanish, and while so documented was captured by a foreign privateer, and afterwards recaptured by a British privateer. The court held that the warranty that the vessel was American implied a warranty that there should be the necessary documents to show it, and that the act of the insured in having their vessel documented as Spanish defeated their right of recovery. Violation of Revenue Laws of Another Country

It is a principle of English law that the English courts pay no attention to the revenue laws of another country; and therefore it is not illegal per se to endeavor to smuggle goods into another country. As such an act would increase the risk, failure to tell the underwriter, at the time of effecting the insurance, that it was contemplated, would be a concealment, and avoid the policy on that ground. But, if both the underwriter and insured knew that such action was contemplated, the policy would be valid, although under exactly similar circumstances an attempt to smuggle into England would be an illegal contract, and avoid the policy.

Mr. Parsons, in his work on Marine Insurance," states this as a general principle of insurance law, equally applying to this country, and cites some American decisions to sustain him. One of these is the decision of Mr. Justice Story in Andrews v. Essex Fire & Marine Ins. Co., above referred to; and certainly in that opinion the justice seems to assume that the underwriters would be bound if they knew that illegal trade with a port of a foreign country was

Insurance Co. of North America, 3 Wash. C. C. 117, Fed. Cas. No. 12,504.

771 Pars. Mar. Ins. p. 34. In Gow, Mar. Ins. (London, 1913) 269, this doctrine is characterized as a "slight obliquity of vision, or a temporary blindness of justice."

contemplated. The decision cannot be considered as absolutely in point, as the underwriters were held not liable on another ground.

Insurance on vessels or goods engaged in blockade running is not illegal. Such a business is not criminal, or immoral, or against public policy. It only affects the belligerent who has established the blockade. Neutrals may run it if they can, and their only risk is of being caught. A vessel cannot be seized on a subsequent voyage for such an act, which shows that there is nothing immoral about it. Accordingly such insurance is common.78

But it is criminal to violate the revenue laws of another country, if made so by those laws; and such violation should be against public policy in any country, and render a contract based upon such act void, even as between the parties.

In Oscanyan v. Winchester Arms Co.," a Turkish consul living in this country made a contract with the Winchester Arms Company by which he was to receive a commission on all the arms of that company which he influenced his government to buy. When he sued for such commissions, the Supreme Court decided that the contract was void as against public policy, and not enforceable. It was urged upon the court that, while such contracts were void. under our law, they were quite the proper thing under Turkish law, and that it was a recognized right of Turkish officials to serve their government in that way. The Supreme Court, however, repudiated the argument, and held that it was a question regarding our own citizens, and that, if such transactions might have the effect of demoralizing them, it would not enforce any rights based upon them. This decision, though not exactly in point on the question above discussed, would, at least, indicate a pos

78 Maritime Íns. Co., Ltd., v. M. S. Dollar S. S. Co., 177 Fed. 127, 100 C. C. A. 547. Gow, Mar. Ins. 270.

79 103 U. S. 261, 26 L. Ed. 539.

sibility that the Supreme Court would think it just as illegal to defraud a foreign government by smuggling as by giving commissions on arms purchased for it.

THE POLICY AND ITS PROVISIONS AS TO RISK AND PERILS INSURED AGAINST

30. The written contract of insurance is called a "policy."

The better opinion is that the word "policy" is from the Latin "polliceor" "I promise." The forms of policies .vary. The most common is the English form, which has been in use for a long time, and the American forms in use in Boston and New York. These vary materially in their general provisions, and, of course, the stipulations in them are varied to suit the special circumstances.

The English form will be found in appendix No. 1 of Park on Insurance. It has been frequently criticised by the courts as ambiguous and inartificial, but its various provisions have now been so generally construed that it is well understood.S0

A good example of the American form will be found in SUN MUT. INS. CO. v. OCEAN INS. CO.81 This was a reinsurance policy on goods, but the important clauses commonly in use will be found embodied in it.

Of the Beginning and End of the Risk

The clause in the English form bearing upon this is worded as follows: "Beginning the adventure upon the said goods and merchandise from the loading thereof aboard the said ship *** upon the said ship," etc., "and so shall continue and endure during her abode there, upon the said ship," etc. "And, further, until the said ship, with all her ordnance, tackle, apparel," etc., "and goods and mer§ 30. 80 The common or "stem" form of the English Lloyds is given in full in Gow on Marine Insurance, 29.

81 107 U. S. 485, 1 Sup. Ct. 582, 27 L. Ed. 337.

chandise whatsoever shall be arrived at

upon the said ship," etc., "until she hath moored at anchor twentyfour hours, in good safety; and upon the goods and merchandises, until the same be there discharged and safely landed."

The American policy above referred to expresses all this more simply, as follows: "Beginning the adventure upon the said goods and merchandise from and immediately following the loading thereof on board of the said vessel at aforesaid, and so shall continue and endure until the said goods and merchandise shall be safely landed at aforesaid."

In filling up the blank indicating the voyage, the initial point is frequently described as "at and from

to

." The meaning of these words varies according to circumstances. They cover injuries received in the initial port in the ordinary course of preparing for the voyage, provided the delay is not unreasonable. For instance, the LISCARD 82 was a case of insurance on a cargo of wheat "at and from New York," and bound for Lisbon. After the loading of the vessel, the signing of her bills of lading, and other preparations to leave port, the vessel cast off her lines for the purpose of starting, but, on account of some trifling derangement of her engines, again made fast to her wharf. While lying there she was run into by a barge. She was surveyed, pronounced seaworthy, and started, meeting very heavy weather, which caused water to damage the wheat. The court held that the policy had attached at the time of this collision.

83

In Haughton v. Empire Marine Ins. Co. a vessel while

82 (D. C.) 56 Fed. 44; London Assurance v. Companhia De Moagens Do Barreiro, 15 C. C. A. 379, 68 Fed. 247; Id., 167 U. S. 149, 17 Sup. Ct. 785, 42 L. Ed. 113. As to the meaning of "breaking ground," see 1 Pars. Mar. Ins. 357 et seq.; 2 Pars. Mar. Ins. 48, 49. In the Gracie D. Chambers, 253 Fed. 182, 184, 165 C. C. A. 82, Judge Ward says that a ship had broken ground "if she had sailed a mile."

83 L. R. 1 Ex. 206.