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If the warranty is of a fact that is not to occur until after the commencement of the risk, and the loss occur before the war. ranty is complied with, it is no breach which discharges the insurers," nor is it such a breach, if a compliance with the warranty was legal when it was made, but becomes illegal afterwards; for the law never requires that an illegal act should be done.
The usual subjects of express warranty, are ownership of the property, its neutrality, and the lawfulness of the goods or adventure, the taking of convoy, and the time of sailing; and we will consider them in their order.
A. Of the Warranty of Ownership. The insurers have, as has been said, the right of personal selection, as it is obvious that property would be far safer if owned and controlled by some persons than if owned by others. But, generally, if they wish to secure any advantage of this kind, there must be express warranty of the ownership; for as we have seen, the owner need not be named; but, as we have also seen, he cannot be changed by assignment or transfer, without the consent of the insurers.3
stated, and Havelock v. lancill, 3 T. R. 277, and Cruikshank v. Jansen, 2 Taunt. 301, are cited. But those cases, as explained by the courts deciding them, do not seem to conflict with the above case of Hore v. Whitmore, in which the doctrine laid down in the text is expressly sustained. See 1 Arnould on Ins. 584.
1 Hendricks v. Com. Ins. Co., 8 Johns. 1; Taylor v. Lowell, 3 Mass. 331, 347; Baines v. Holland, 10 Exch. 801, 32 Eng. L. & Eq. 503 ; 1 Phillips on Ins. 9 771. Mr. Arnould questions this doctrine, and contends that it was competent for the parties to contract that the policy “should be void in tolo, as well upon the non-performance of some promised act, as upon the non-existence of some alleged event,” and says it seems to him that they must be taken to have done so. But it is clear that if a total loss should happen before the time at which the warranty is to be complied with, the insurer'would have no defence, even if he could show that the insured intended not to comply with it. This must have been in the contemplation of the parties, and seems to show that they could not have intended to make the contract void ab initio in case of a non-compliance with the warranty. See 1 Arnould on Ins. 583.
2 Brewster v. Kitchell, 1 Salk. 198, 1 Ld. Raym. 317. 3 See ante, p. 45.
B. Of the Warranty of Neutrality. · The most usual cause of requiring a warranty of ownership, occurs where this is done in order to make it certain that the property is neutral, or at least to prevent the underwriters from assuming any risk arising from the belligerent character of the property. A warranty that the property is "English" or
A “ French," means that it is owned by Englishmen or Frenchmen, and has the proper proof and evidence of such ownership.1 To determine to what nation a person belongs, regard must be had to the question of domicil. Thus,
Thus, as we have already seen, if an American is residing in England and engaged in trade there, he is as to that trade considered as an Englishman, and if he insures goods, and warrants them to be American property, the underwriters are not liable for a loss by capture. A colony partakes of the nationality of its parent country, so that the produce of an estate in a colony of a belligerent power, owned by a neutral, is considered as belligerent. But it seems that if the property is once landed in a neutral country, or brought there in vessels, and then removed from those vessels to others in which it is to be exported, it is considered as neutral. But if the importation is only colorable, and the intention of the importer is to transship and export the goods, their original character remains.
These questions have grown out of a rule of law which appears to be well-established by the English courts, though it
1 Baring v. Clagett, 3 B. & P. 201 ; Lewis v. Thatcher, 15 Mass. 431.
The Maastrom, cited 5 Rob. Adm. 21 ; The Juffrow Catharina, cited id. 21; The Phoenix, id. 20.
Berens v. Rucker, 1 W. Bl. 313. In The Polly, 2 Rob. Adm. 361, an American vessel was captured on a voyage from a port in Massachusetts to Spain, with a cargo consisting partly of the produce of a Spanish colony. The goods had been imported from Havana in the same vessel, for the same owners, and had been landed in the United States, while the ship was being repaired, and duties paid on them. Sir William Scott held, that although the landing of the goods and the payment of duties on them might not be universally the test of a bonâ fide importation, yet that they were generally the criteria, and a restoration of the vessel was ordered. 6 The Essex, cited 5 Rob. Adm. 369; The William, id. 385; The Maria, id. 365. VOL. II.
has never been recognized in this country, but on the contrary. strongly repudiated, and which, it seems to us, is in direct conflict with every principle of the law of nations. This rule is, that a country which, during peace, confines the trade of its colonies to its own subjects, cannot, during war, open such trade to a neutral.1
1 This subject has been so elaborately discussed by the jurists of this country and England, that were we to attempt a full consideration of the question, we should only be able to repeat what has been before said, and we shall, therefore, confine ourselves to a brief statement of the origin of the rule, and the reasons which have been urged in its support, and against it. This rule is generally known by the name of the rule of 1756, because many vessels were then condemned for engaging in the colonial trade of France, but Mr. Duer contends that these cases were decided on a different ground from the subsequent authorities. See 1 Duer, Ins. 705. But the rule was acted on by Lord Stowell, as is stated in 1 Arnould, Ins. p. 629, from the year 1792 to 1815, and is firmly established in England. Mr. Arnould states that the rule rests on two grounds : "1. That the neutral, by thus acting, interposes to relieve the enemy from the condition to which the other belligerent had reduced him, and to that extent deprives that belligerent of the advantage he had gained ; 2. That the neutral employed in a trade reserved by the enemy to his own subjects, identifies himself with that enemy, and assumes his character.” To these reasons another has been added, that as the neutral nations are permitted to enjoy the whole of the trade to which they were entitled in time of peace, they can sustain no injury by their exclusion from that which is first opened to them in time of war. See 1 Duer, Ins. 706.
The objections to the rule are, that it is not founded on the law of nations, but is a most unwarrantable extension of the law of blockade "at utter variance with the principle on which the law of blockade is certainly founded,” it being a well-settled principle of law that a neutral has a right to trade with a belligerent except in contraband goods, and to a blockaded port. The last reason for the rule is open to the objection that it has no foundation in point of fact. If a neutral had, in time of war, the same rights which he has in time of peace, there would be an apparent equity for the rule, but in time of war he is entirely cut off from all trade in contraband articles, and to blockaded ports. In support of the English rule, see The Ebenezer, 6 Rob. Adm. 250 ; The Emmanuel, 1 id. 296; The Immanuel, 2 id. 186, 200; The Rebecca, id. 101 ; The Minerva, 3 id. 229; The Jonge Thomas, id. 233, note; The Charlotte, 4 id. Appendix, p. 13; The Welvaart, 1 id. 122; The Providentia, 2 id. 142; The Calypso, id. 154; The Rosalie & Betty, 4 id. Appendix A. p. 3, n.; The Juliana, 4 id. 328; The Convenientia, id. 201 ; The Anna Catharina, id. 107; The Thomyris, Edw. 17; Lord Liverpool's “Discourse on the conduct of the government of Great Britain,” etc.; Ward “On the rights and duties of belligerents and neutrals ;” Stephens'
“ War in disguise.”
The rule has been repudiated by the government of this country on the ground that neutrals are entitled “to trade, with the exception of blockades and contrabands, to and between all ports of the enemy, and in all articles, although the trade should not have been opened to them in time of peace.” Mr. Monroe's letter to Lord Mulgrave, September 23, 1805, and Mr. Madison's letter to Messrs. Monroe & Pinckney, May 17, 1806. See also, the memorials of the merchants of Baltimore, New York, Boston, and Salem, 5 American State Papers, 330–355, 367–379. The Baltimore memorial
If the property is warranted to be of a certain country, at a time when that country is known to be at peace, this may be regarded as equivalent to a warranty of neutrality. And a warranty that the ship or the cargo is neutral, or neutral property, means, first, that it is actually owned by citizens of a country not at war when the risk begins; and, secondly, that with the property there shall go all those usual documents and precautions which prove the neutrality of the property and protect it from belligerent risks. But a declaration of war, made after the policy is made, although it may render the property belligerent, does not avoid the policy.
If the neutral or national character of the property be not expressly warranted, but some fact is warranted, or so asserted as to amount to a warranty, and this fact, if true, would necessarily imply the neutrality of the property, then that neutrality is warranted. It seems to be well settled that “whoever embarks his property in shares of a ship is bound by the character of that ship.” If, therefore, a neutral owns part of a vessel, though it is purchased and held before the war, and the rest of the vessel is owned by belligerents, the whole vessel is subject to condemnation. And it would, therefore, follow that a warranty of neutrality would be broken if a belligerent owned any part of the vessel.
In regard to goods, the rule is different, and the warranty of neutrality is held to extend only to the interest of the assured, and is not broken by the fact that a part of the cargo not insured is not neutral.5 But if the warranty is by an insured, whose interest covers the whole, the belligerent character of any part would render the whole liable to condemnation;6 and so it should be if in an
was drawn by Mr. Pinckney. We must also call the attention of the reader to the learned and elaborate essay by Mr. Justice Duer, to which we are much indebted for a clear and accurate statement of the law on this subject. i Duer, Ins. 698-725.
1 Eden v. Parkison, 2 Doug. 732; Saloucci v. Johnson, Park on Ins. 449, per Buller, J. See also, Tyson v. Gurney, 3 T. R. 477.
2 See ante, p. 106, and cases cited.
8 The Vrow Elizabeth, 5 Rob. Adm. 2; The Primus, 1 Spink, Adm. 353, 29 Eng. L. & Eq. 589; The Industrie, 1 Spink, Adm. 444, 33 Eng. L. & Eq. 572.
* The Vreede Scholtys, 5 Rob. Adm. 5, note; The Primus, supra. 5 Livingston v. Maryland Ins. Co., 6 Cranch, 274 ; Barker v. Blakes, 9 East, 283.
Goold v. United Ins. Co., 2 Caines, 73; Murray v. United Ins. Co., 2 Johns. Cas. 168; Bayard v. Mass. F. & M. Ins. Co., 4 Mason, 256. In Calbreath r. Gracy, 1 Wash. C. C. 219, it was held, that if property is warranted neutral and the insured is owner
insurance of any part there were an express warranty that the whole cargo was neutral. The law looks at the equitable or beneficial interest in determining this question; and, therefore, property held by a neutral by a legal title, but in trust and for the benefit of a belligerent, is belligerent property. And it has been held, that goods sold to a belligerent and to be delivered to him in his own country, are belligerent during their transit; 2 but it would oppose the general principles of the law of contract, to give this character to the property if the sale were not completed and the property transferred so as to be at the risk of the belligerent, who had paid, or was bound at all events for the price.
If neutral goods are shipped, in time of peace, to a consignee who has not ordered them, so that the property would not vest in him till the goods were received, in case of capture they are considered as the property of the consignor. But if they are shipped by a neutral after the war begins, and under a contract made during peace, but in contemplation of war, and to be at the risk of the sender until delivery, they are put on the same footing as if the contract were made during war.5
of one third, yet if he is joint owner with others of the whole, this is a warranty of the neutrality of the whole, but otherwise if the other persons have only a colorable interest.
1 Murray v. United Ins. Co., 2 Johns. Cas. 168. See also, The Abo, 1 Spink, Adm. 347, 29 Eng. L. & Eq. 591.
2 The Atlas, 3 Rob. Adm. 299; The Sally, cited 3 id. 300; The Anna Catharina, 4 id. 107; The Jan Frederick, 5 id. 127. See also, The Ann Green, 1 Gallis. 274; The Francis, 1 Gallis. 445; 1 Kent's Com. 86; 1 Duer on Ins. 423, et seq.
3 The principle laid down in the decisions cited in the preceding note was opposed with great force in DeWolf v. N. Y. Firem. Ins. Co., 20 Johns. 214, 2 Cowen, 56. The objection, as stated by Spencer, C. J., is substantially this : As the property in goods on their way to a belligerent to be delivered to him in his country does not pass under the contract of sale until the delivery, the principle of the above cases would expose all property bound to an enemy's country to capture and condemnation, and thus overthrow the general principle that trade between neutrals and belligerents, except in contraband goods, is lawful. See also, Ludlow v. Bowne, 1 Johns. 1.
4 The Abo, 1 Spink, Adm. 347, 29 Eng. L. & Eq. 591.
6 The ‘Packet De Bilboa, 2 Rob. Adm. 133, 135, per Sir William Scott. “A distinction has, indeed, been admitted in favor of contracts made before a war and without any contemplation of it; but if the contract, being made before the war, and without any prospect thereto, is carried into execution by a shipment after the breaking out of hostilities, the ground on which that favorable distinction is made no longer exists.” Per Sir William Scotl, The Anna Catharina, 4 Rob. Adm. 107, 112.