CHAPTER XIII.

Of Prohibited Goods.

THE subject of the present chapter is materially connected

66.

Roccus de

No. 21.

Assecur.

with that of the foregoing; and indeed follows as a consequence from the doctrine there advanced. We then saw that a contract founded upon that which was contrary to law, could never be carried into effect. Thus by the laws of almost all countries, the exportation and importation of certain commodities are declared to be illegal: to act contrary to Ld. Kaims, that prohibition is clearly a contempt of legal authority; and Prin. of Eq. consequently a moral wrong. If the act itself be illegal, the insurance to protect such an act must also be contrary to law: and therefore void. Agreeably to this principle, it seems to have been laid down by the writers upon the subject, as a general and universal proposition, that an insurance being made, although in general terms, does not comprehend prohibited goods; and therefore when the insured shall procure such commodities to be shipped, the underwriter being ignorant of it, by means of which the ship and cargo are confiscated, the insurer is discharged. In this passage from Roccus it may be inferred, that if the underwriter knew that the goods were prohibited, the insurance would be valid. But we trust, it was sufficiently shewn in the preceding chapter, that that will not alter the case: because no consent or agreement can render a contract good and valid, which, upon the face of it, is contrary to law. In France this rule was adopted so long ago as the year 1660: for in the work of a very respectable writer of that age we find this passage: : assurances se peuvent Le Guidon, faire sur toute sorte de merchandize, pourvu que le transport ne c. 2. art. 2. soit pas prohibé par les edicts et ordonnances du roy. And from Emerigon an authority no less respectable, it appears that the law of Traité des France has undergone no alteration since that period; for, tom. 1. c. 8. he says, "that those effects, the importation or exportation *.5.

VOL. II.

B

or c c

"of

Assurances,

Molloy,

lib. 2. c. 7. s.15.

"of which is prohibited in France, cannot be the subject"matter of the contract of insurance; and if they should be "confiscated, the insurers are not responsible, even where "the truth has been declared by a special clause in the policy. "The assurance is void, and no premium is due." This passage from the celebrated work just referred to, confirms the idea above started, with respect to the knowledge of the underwriter.

The law of England, whose commercial regulations have surpassed those of every other nation in the world, has also introduced such a rule into its system of mercantile jurisprudence: and the oldest writers upon the subject have taken notice of it. It is said, "if prohibited goods are laden

66

aboard, and the merchant insures upon the general policy, "it is a question whether if such goods be lawfully seized as prohibited goods, the insurers ought to answer. It is con"ceived they ought not: for if the goods are at the time of "the lading unlawful, and the lader knew of the same, such "assurance will not oblige the insurer to answer the loss; for "the same is not such an assurance as the law supports, but મી "fraudulent one."

But it is not upon the opinions of learned men merely, that this doctrine is founded in the English law; for the legislature have by positive statutes declared their ideas upon the subject. It appears from the preamble to that section of the statute about to be quoted, that a custom, highly prejudicial to the revenue of the country, had prevailed, and was increasing to a very alarming degree, of importing great quantities of goods from foreign states in a fraudulent and clandestine manner, without paying the customs and duties payable to the crown: and that this evil had been encouraged and promoted by some ill-designing men, who, in defiance of the laws, had undertaken as insurers, or otherwise, to deliver such goods so clandestinely imported, at their charge and hazard, into the houses, warehouses, or possession, of the owners of such goods. In order to remedy this mischief, it was enacted, "that all and every person and persons, who, by way of & M. c. 15. insurance or otherwise, should undertake or agree to deliver 500l. penal-any goods, wares, or merchandizes whatsoever, to be im

4 & 5 W.

S.14, 15, 16.

ty on persons

66

hibited

ported from parts beyond the seas, at any port or place insuring to "whatsoever within this kingdom of England, dominion of import pro"Wales, or town of Berwick upon Tweed, without paying goods. "the duties and customs that should be due and payable for "the same at such importation, or any prohibited goods what"soever; or in pursuance of such insurance, undertaking, or agreement, should deliver, or cause or procure to be deli"vered, any prohibited goods, or should deliver, or cause or procure to be delivered, any goods or merchandizes whatsoever, without paying such duties and customs as afore"said, knowing thereof, and all and every their aiders, "abetters and assistants, should for every such offence forfeit " and lose the sum of five hundred pounds, over and above all "other forfeitures and penalties, to which they are liable by

66

66

66

Sect. 15.
Likepenalty

any act already in force." It is also enacted, "that all and every person and persons, who should agree to pay any on the in

sum or sums of money for the insuring or conveying any sured. "goods or merchandizes that should be so imported, without "paying the customs and duties due and payable at the im

portation thereof, or of any prohibited goods whatsoever, " or should receive or take such prohibited goods into his or "their house or warehouse, or other place on land, or such "other goods before such customs or duties were paid, know"ing thereof, should also for every such offence forfeit and "lose the like sum of five hundred pounds; the one half of "the said forfeitures to be to their majesties, and the other "half to the informer, or to such persons as should sue for "the same. And if the insurer, conveyor, or manager of "such fraud should be the discoverer of the same, he should not only keep the insurance money or reward given him, " and be discharged of the penalties to which he was liable 66 by reason of such offence, but should also have to his own

66

66

use one half of the forfeitures hereby imposed upon the party

or parties making such insurance or agreement, or receiv"ing the goods as aforesaid: and in case no discovery should "be made by the insurer, conveyor, or manager as aforesaid, "and the party or parties insured or concerned in such agree"ment should make discovery thereof, he should recover and "receive back such insurance money or premium as he had "paid upon such insurance or agreement, and should have to "his own use one moiety of the forfeitures imposed upon

c. 36. s. I.

"such insurer, conveyor, or manager as aforesaid, and should "also be discharged of the forfeitures hereby imposed upon "him or them."

A few years afterwards, lustrings, the manufacture of which till then was little known in England, having been worked to great perfection by the Royal Lustring Company, the legislature found it necessary to protect this branch of trade, by prohibiting the importation of such silks from foreign countries into this, without paying the duties, whether by direct means, 8 & 9 W. 3. or by the way of insurance. It was enacted, " that every per"son, who should import any foreign alamodes or lustrings "from parts beyond the seas, into any port or place within "the kingdom of England, dominion of Wales, &c. without "paying the rates, customs, impositions, and duties, that "should be due and payable for the same at such importation, "or should import any alamodes or lustrings, prohibited by "law to be imported, or should, by way of insurance or "otherwise, undertake or agree to deliver, or in pursuance of "any undertaking, agreement, or insurance, should deliver, "or cause to be delivered, any such goods or merchandize, " and every person who should agree to pay any sum or sums "of money, premium, or reward for insuring or conveying "any such goods or merchandize, or should knowingly take "or receive the same into his, her, or their house, shop, or "warehouse, custody or possession, such person or persons "should and might be prosecuted for any of the offences or "matters aforesaid, in any action, suit, or information.”

Sect. 2.

Mir. c. I.

S. 3.

II Ed. 3.

C. I.

The second section of this statute enables persons to sue for the penalties imposed by the former act of William and Mary by action of debt, bill, plaint, or information, in any of His Majesty's courts of record of Westminster.

Wool being the staple manufacture of this kingdom, it was always deemed a heinous offence to transport it out of the realm: for we find it was forbidden at the common law; 8 Eliz. c. 3. and afterwards more expressly in the reign of Edward the Third, since which period this branch of trade has been much attended to, and any offences against it have 4 G. 1. c.II. met with corporal and pecuniary punishments by several

12 Car. 2.

C. 32.

c. 28.

subse

c. 21. S. 2).

subsequent statutes. This being the case, an insurance upon wool so to be exported must have been void; because the very foundation of the contract was contrary to law. But notwithstanding these restrictions, the practice of exporting wool became so frequent, as well as the practice of insuring such cargoes, and undertaking to deliver them safely abroad, that it became necessary for the legislature to interpose, and by a new declaration of the law, and the imposition of a heavy penalty, to endeavour to check the growing evil. Accordingly it was enacted, "that every person, who by way 12 G. 2. "of insurance or otherwise, should undertake or agree, that any wool, wool-fells, wool-stocks, mortlings, shortlings, "worsted, &c. should be carried or conveyed to any parts "beyond the seas from any port or place whatsoever within "this kingdom or Ireland; or in pursuance of such insu"rance, undertaking, or agreement, should deliver, or cause "to be delivered, any of the said goods, in parts beyond the 66 seas, such person, and all and every his aiders, &c. should "for every such offence forfeit and lose the sum of five "hundred pounds." The next section inflicts a like penalty on the insured: and the following one, in order to procures encourage the parties to disclose such contracts, releases the wool to be party informing from all the penalties to which he himself was subject, and also gives him the whole of the forfeiture, after deducting the charges of the prosecution.

500l. penal

ty on the insurer who

landed in foo

reign parts,

Sect. 30.

Sect. 31.

But in order wholly to prevent this illicit exportation of wool, it was necessary for the legislature to go one step further: because, as policies are frequently made on goods, as well as on ships, in which the insurer undertakes, in consideration of the premium, to bear all the risks and hazards of the voyage; and as it is generally unknown to the insurers what sorts of goods are loaded on board any ship or vessel, it happened that insurances were made on wool or woollen yarn to be carried from Great Britain or Ireland to foreign ports, or on woollen manufactures to be carried from Ireland. Therefore it was declared, "that all policies of insurance, which Same act, "should be made on goods and merchandizes, loaden or to $. 33"be loaden, on any ship or vessel bound from Great Britain on woollen "or Ireland to foreign parts beyond the seas, which should goods void. " afterwards appear to be wool or woollen yarn, or any other

Insurances