Case ID: scl_13/html/0503-01.html
Source: Caselaw Access Project
Author: {"author": "JMr. Justice Huger\n    ", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

McFee & Calder vs. South-Carolina Insurance Company.
    The courts here will not notice the revenue laws of a foreign country.
    Clearing out for a neutral, with the intention of sailing for a belligerent,' port, will not avoid a contract of insurance.
    
      If a voyage be defeated by one or more of the perils, enumerated in thd contract of insurance, the insurer may abandon and recover as for a total loss.
    THIS was an action on a policy of insurance for 214 bales of cotton, valued at $27 50-100 per bale, shipped per the Swedish ship Crown Prince, at and from Charles-' ton to Portsmouth, in Great-Britain, and thence to the river Medway or river Thames, with liberty of transhipping the same at Portsmouth or Chatham for London, by a regular coasting vessel. The policy bore date the SOth of April, 1812, and the premium was 8 per cent, on $5,SS5. It was written on the policy that the invoice was on account and risk ofBrish-h subjects residing in Great-Britain, bul was the property' of McFec 4' Colder, the plaintiffs. It appeared in evidence that the vessel sailed for Charleston on the 6¡h May, having cleared for Antwerp; that the clearance was published in the daily papers of the city four days before the policy was signed. That her bill of lading stated that she was hound for Falmouth, and the cotton was to bo landed at London, and was consigned to D&nnistown, Buchanan fy Co. it was dated on the 2d May, 1812. The invoice was dated the 28th April, and was on account and risk of Bcnnistown, Buchanan ¿y Co. The protest was signed by one Christian He n neburgh, as captain. It was adduced in evidence and set forth among other things, that they experienced gales and heavy seas on the 13th, 15th and 17th. On "which last day, at half past 3 o’clock, they found six feet water in tire ship’s hold ; they set both pumps at work and freed her. Found she made twelve inches water in fifteen minutes ; that the crew refused to proceed on the voyage, and it was concluded, for the preservation of their lives and of the ship, to bear away for port; that they kept one pump at work constantly, and on the 20th anchored in the Hudson river, and had her surveyed.— The plaintiffs then adduced the examination under commission of the surveyors, who found, inter alia, at suebessíve examinations, that her upper works were open and required calking; that one of the starboard fore-shrouds was stranded; that the scarf of the kelson was open and split about 18 inches from the heel of the foremast abaft; the chain bolts of the main channels on the larboard side worked loose; some of the sheathing of the stern gone ; they then recommended that she should be hove keel out, which being done, they found her false keel entirely shattered from stem to stern; her sheathing Considerably1 worm eaten, and the sheathing nails so much rusted as to be unsafe for her to proceed to sea without having her bottom calked. They found her foremast about one foot below the hounds very rotten, and totally unseaworthy ; also, the heel of the foretopmast very rotten arid’ unfit for use; likewise, two cross trees broken ; the bowsprit was ajso defective and rotten, and the foretop and trussel trees in a similar situation. The plaintiffs, upon hearing that she had put into New-York, offered to abandon to the company, by letter dated 9th June, 1812, inclosing a let» ter from Mr. Jumes Boggs, of New-York, who was agent for the underwriters at Lloyd’s, to H. Bryce, who was the Charleston agent o'f the ship owners, in Which Mr. Boggs stated, that a few days before the Crdwn Prince sprung aleak, she was boarded by the British ship of war Recruit, Captain Senhouse, and on acedunt of the cotton not being included in the licence, as well as from a doubt of her true destination, an officer was put on board, with directions to libel the ship on her arrival in England ; that he (the writer) had written to England to procure a licence for the cotton, but he added, as she could not be safely hypothecated, the cotton must be sold to repair hdr. The examination of Mr. Boggs was then adduced, which ’established, among other things, that the ship having sprung aleak, put into New-York with a British midshipman on board, who had orders to libel her in England for carrying cotton without a licence; that the cargo consisted of lumber and 300 bales of cotton, 214 of which were shipped by the plaintiffs. The repairs of the ship. amounted to $ 5,572 23. To reimburse .the witness these repairs, the cotton was sold and brought altogether $7038 06 nett. The 214 shipped by the plaintiffs brought. $4819 54. In the opinion of this witness, the political state of the country had its influence in determining the captain to sell the cotton. He proved that by*' the navigation laws of Great-Britain, cotton, the produce of the United Slates, could not be imported into that country in a Swedish vessel. The defendants resisted the claim upon the ground, that, the ship was proved to be not? seaworthy when she sailed. That if she had been, yet she was not properly documented, as she wanted a licence to import cotton, the produce of the United States into Great Britain in a Swedish bottom. That her papers were moreover irregular and contradictory, and had actually subjected her to detention, particularly her clearance which was .falsely for Antwerp. That the concealment of this false clearance and the want of the licence for the cotton, were very material and vacated the policy ; that at any rate the Insurance Company were not liable for a total loss, only a partial one, as the plaintiffs under the circumstances had no right to abandon.
    To prove such of the facts as were necessary to their defence, the defendants produced the examination of Captain Si ¿liman, who denied the existence of the storms, described by the captain and of Mr. Mathews, a passenger in the ship, in that voyage. These witnesses contradicted the protest in important particulars, especially Mr. Mathews, who testified that the ship met with no tempestuous or any such weather as would have done harm to a staunch vessel, and that he had twice crossed the Atlantic in vessels that, made as much water as the Crown Prince, when she went, into New-York.
    The plaintiffs in reply examined several witnesses who were of opinion that it was customary to procure a licence' for landing the cotton after it had arrived at an out-port in Great-Britain; that false clearances were not uncommon, and were intended to deceive belligerents and diminish-the risk. Several captains of ships, and one ship carpenter were examined, and who were of opinion, on having the surveys read, that she must have been seaworthy when, she left Charleston.
    Here the case closed, and was argued upon the grounds taken by the defendants, and the plaintiffs claimed a verdict as for a loss by general average.
    The presiding judge in his charge to the jury told them that he knew no law prohibiting the trade insured ; that he saw no reason why a licence should be adduced before entry into a British port, and the evidence of the course of trade, he thought, established it to be unnecessarj ; that the question concerning the false clearance was one for the jury to determine, and that the evidence had proved it conformably to the usage of trade ; that the object clearly was to evade a search by a belligerent, but that if it increased the risk at the time the contract was made, the policy was void. It appeared to him, however, that the defendants knew or- should have known that under the usage of trade it was a risk to be encountered, and he thought it in fact lessened the risk, or it would not have been done ; that there was no concealment, as the defendants knew the voyage was to Portsmouth, notwithstanding the clearance to Antwerp; that with respect to the partial or total loss, the true question was, was the voyage defeated by one or more of the perils of the sea, covered by the policy? If so, the plaintiffs were entitled to recover; that .selling the cotton in New-York was the best mode by which the repairs could be paid for, but there was no evidence that the lumber was sold for the repairs of the ship, and he believed the truth to be, that it could not be shipped, because the war prevented it. That with respect, to the question of seaworthiness, he was of opinion upon the facts and testimony, that the vessel was unseaworthy ; that the extent of the repairs she.had required was a strong circumstance to show what her situation must have been prior to a storm, which he could not think had been very serious, and to which therefore so much in-.; jury could not be fairly attributed ; be left it to theiri however to decide whether she was seaworthy or not.
    They found for the plaintiffs.
    A motion was now made to set aside this verdict.
   JMr. Justice Huger

delivered the opinion of the court:

In this case, four questipns have been made for the consideration of the court:

1st. Was it incumbent on the insured to procure a licence or order in council for the landing of the cotton in England before the Crown Prince reached Portsmouth ?

2nd. Was the clearing for Antwerp, when her destinar fion was Portsmouth, sufficient to avoid the policy ?

3rd. Under the circuinstances stated, are the ensured entitled to claipa as for a total loss ? and,

4th, Is the finding of the jury conclusive on the seaworthiness of the ship ?

I shall consider the questions in the order they have .been stated;

1st. As to tlte licence. It is very clearly established that the revenue laws of Great-Britain prohibit the importation pf all produce, the growth of a foreign country, but in vessels of such country,-pr in British bottoms. It is equally clear that the cotton insured was the growth of the United States, and that the Crown Prince was 3 Swedish vessel. The defendants then undertook to insure a voyage which they must have known was prohibited by the laws of (3-reat-Britain. Whatever then be the risks of such a vayage, the defendants undertook to indemnify the plaintiffs in the event of a loss by either or all of them. — ¡ They cannot now be permitted to defend themselves on thp ground of the illegality of such a voyage. We are not here to enforce the revenue laws of another nation. — : Had this contract been iq derogation of our own, we must have declared it void. The penalty imposed by GreatJBritain for a breach of her laws may be enforced there, and tlje liability to such a penalty there, is a risk which srjay be legally inguped against hpre. I do not, however Understand the defendants to go this length. They only Contend that the revenue laws of Great-Britain form a part .of the usage of the trade between that country and this, which are supposed to be known to the contracting parties, and with reference to,which, the policy is to be construed, and they insist that although the cotton in question was generally prohibited by the revenue laws of Great-Britain, yet, that it was the established usage to admit it to entry, whenever a licence to do so had been procured prior to the shipment; but of such a usage, they have furnished no evidence. It appears indeed that the lumber shipped with the cotton was protected by such a licence; but this lumber was clearly intended for the government of Great-Britain, and the licence was probably given as an inducement to the merchant to contract on better terms for the government. But independent of the peculiar circumstances attending this licence, its singularity is sufficient to repel the idea of the pretending usage. All the witnesses examined on this point prove (if they prove any thing) that the usage was to procure a licence or order in council aftér the arrival in Great-Britain. If ■therefore the policy was made with reference to any usage, it was to that of which these witnesses speak, and the understanding of the' parties was, that a licence was to be obtained on the ship reaching Portsmouth. As she never reached her destination, a licence or order in council for landing the cotton could not be procured. The insured, therefore, did not omit to do any thing that it was incumbent on them to do. On the first ground then, the appellants must fail.

On the second ground, it has been contended that the .clearance for Antwerp, when she was in fact to sail for, Portsmouth, was a material concealment, and enhanced the risk, and consequently discharged the underwriters. All the witnesses examined prove, that it was customary to clear out for a neutral, when destined for a belligerent, port. The object Avas to diminish, not increase the risk, .of capture. The French decrees had interdicted all trade between neutrals and the British isles, and Britain had retaliated. Any means which were calculated to evade these outrageous and unjust restrictions were permissible, and a clearance from a neutral to a neutral port, was not only a justifiable, but in many instances an effectual shield against lawless violence. That this was the only object is. unquestionable ; that it diminished the risk of capture by French cruizers, I have no doubt ; that this was so understood by the defendants themselves, appears from the usage proved ; and that they knew of it,'appears not only from the usage proved, but from the publicity given to the course she was about to pursue. It was published in the daily papers of the city, days before the policy was effected, that she had cleared for Antwerp, and yet they insured her voyage to Portsmouth. But whether such a. clearance increased or diminished the risk, was'a question of fact for the jury ; they were so told ; they found for the plaintiff, and in so doing, have decided, that, in their opinion, the risk was not increased. In Planche and another vs. Fletcher, (Doug. 238,) Lord Mansfield lays down the same doctrine. On the second ground, therefore, the defendant must also fail. The third quesr tion has been embarrassed by considerations not necessary to its solution. Unquestionably, a voyage may be defeated by causes not covered by the policy, in which case the underwriters would not be responsible, and it is equally true that the plaintiffs could not at pleasure convert a partial into a total loss. They can only recover as for a total loss by shewing that the voyage ensured has been defeated by one or more of the perils enumerated and included in the policy ; that the voyage was defeated in this case, is unquestionable. The cotton was shipped here, and was to have been landed in Portsmouth, where it never got. The next enquiry is, by what causes or perils was the voyage defeated ? It is clear that the Crown Prince was obliged to put into New-York in consequence of springing aleak in a gale of wind or swell of the sea. The -repairs required were very serious, and must have occu'pied much time. There were no less than five different surveys. When she arrived in New-York, does not exactly appear. It was I presume about the 23d of May, for on that day, the first survey-was had, and the surveyors were then of opinion “ that her upper- works were open and required calking, and that she should be lightened of her cargo in part or the whole, as the case may require, to find out the leak without heaving the vessel down.” On the 5th of June, the second survey (B.) was had ; the leak had not then been discovered, for the surveyors say among other things, that the sheathing of her stern was gone, and the main leak not being yet discovered, it was necessary, in their opinion, that she should fce hove keel out. On the 10th of June, the third survey (C.) was had, and it was discovered, say the surveyors, that her false keel was entirely shattered from stem to Stern ; her sheathing worm eaten, and her nails so much injured as to'render it necessary- that, she should be calked. On the second of July, the fourth survey (D) was had ; when further defects were discovered ; and on the 15tii of July, the fifth and last survey' was had, when stiil further defects were discovered. From these different surveys, it appears that the defects were not discovered at once ; that her repairs were commenced before the extent of them was ascertained, and that it was not until after the 15th of July, she could have re-shipped her cargo.— Long anterior to her arrival in New-York, the embargo act had been passed, which prevented all American vessels from sailing. The cotton, therefore, from the day of its being landed in New-York to the 18tb of June, when the declaration of war took place, could not have been transhipped in an American vessel, and from the provisions of the embargo act, the cotton could not have been shipped in any other neutral vessel pending that embargo, if one could have been found. Under tbe.se circumstances, the only' mode of forwarding the cotton appears to have been the one attempted by the captain, to repair' his 'ship and proceed on his voyage. For these repairs, hé •applied to Mr. Boggs, and to repay him, .the cotton of tíié-'' plaintiff was sold. In selling this cotton, -however, the-captain appears to have done only what the necessitjr of the case imposed on him. For it appears from Bogg’s' testimony, that the vessel and cargo could not be hypothecated from the uncertainty of her fate, when she should ■arrive'in England, as well as from the political complexion of the times. '

Prioleau, for the motion.

Simons, contra.

The embargo then appears to have been a sufficient cause for not procuring a vessel for the transportation of the cotton after its arrival in New-York; and before the Crown Prince was repaired, the declaration of war prevented her carrying it. The voyage was then defeated, first, by the leak she sprung at sea ; second, by the embargo ; and lastly, by the war ; and all these perils arc? covered by the policy ; the first under the perils df the seas,” and the last two under all restraints and detainments of all kings or people of what nation, condition, oV quality soever.” On the third ground, therefore, the motion must also fail. I was of opinion on the trial of this ease below, that the Crown Prince was not seaworthy When she left the port of Charleston. I have since seen no cause to change my opinion. The court however regard it as a question for the jury, and they will not di-s* Éurb the verdict on that ground.

The motion is therefore discharged.

Justices Johnson, Nott and Gantt, concurred»'