Case ID: mass_6/html/0191-01.html
Source: Caselaw Access Project
Author: {"author": "Sedgwick, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Allan Pollock versus Adam Babcock.
    An insurance is made upon merchandise from Boston to Rio Janeiro. On the voyage, the ship puts into a port in Portuguese America for supplies, where she is arrested, and, with her cargo, detained by the Portuguese government, because it appeared she was bound to a port where, by law, Americans were not permitted to trade. The assured abandoned to the underwriters, and recovered for a total loss.
    Assumpsit on a policy of insurance upon five boxes and eight trunks of merchandise, valued at 15,000 dollars, on board the schooner Samuel, from Boston to Rio Janeiro. The defendant subscribed 200 dollars.
    At the trial, which was had upon a review by the defendant, before Parker, J., at the last November term in this county, the interest of the plaintiff was proved as alleged, and at the time of executing the policy, it was generally known, that by the laws of Portugal, all trade by Americans at Rio Janeiro was prohibited, though vessels frequently cleared out for, and went to, that port from the United States, where an illicit trade was carried on.
    The vessel, having sailed with the goods insured on board, was proceeding on her voyage to Rio Janeiro, but, * having met with head winds and currents, was de- [ * 836 ] tained so long as to become short of provisions and water; to supply which she put into a place called St.--, on the Brazil coast, when she was seized by the people of the country, and from thence carried to Pernambuco, where the crew were imprisoned, and the vessel and cargo refused to be delivered up by the person acting as governor; the captain and supercargo having used all possible exertions to obtain a restoration of them. From Pernambuco the crew were sent to Lisbon.
    
    Seasonable notice of the loss was given at the broker’s office where the policy was effected, and an offer to abandon was made, but was not accepted.
    ■ The ground on which the seizure was made, as appears by a copy of the proceedings before the officers at Pernambuco, was, that it appeared by the papers of the vessel that she was bound to Rio Janeiro, (with intention to trade,) a place where, by the laws of Portugal, it was unlawful to trade. It was not alleged that there had been any attempt to trade, or any actual trading, when she was seized, or at any time during the voyage.
    The principal grounds of the defence were, — that the vessel was not sea-worthy, not being competently supplied with wood and water for the voyage ; and that there had been a deviation from the known and usual course of the voyage, both of which points were wholly left to the jury upon the evidence.
    It was further insisted in the defence, that as the vessel was in fact bound to a port at which it was unlawful to trade, and was seized on that account, that this was not a risk insured against by the policy, it not being intended to insure against the consequences of illicit trade.
    The jury were directed, that as the goods were insured until they arrived at Rio Janeiro, if they were satisfied that the putting into St.-was of necessity, and not for the purpose of trading, and that in fact no attempt had been made to trade in [ * 236 ] the course of the voyage, this seizure, * because the vessel was bound to the place to which the goods were insured, was a loss by a peril ins ired against. — A verdict was thereupon returned for the plaintiff, subject to the opinion of the Court on the foregoing direction to the jury; if that was right, judgment to be entered on the verdict, with additional damages for interest; otherwise a new trial to be granted.
    The motion for a new trial was argued at this term by Gray and Jackson for the plaintiff, and Dexter and Channing for the defendant.
    
      For the defendant, in favor of a new trial, it was said that at the time of effecting this insurance, it was the understanding of all parties that a lawful trade might be carried on at Rio Janeiro, by permission of the government there, and as an assurance against the consequences of an illicit trade was neither proposed nor made, the underwriters had a right to presume that none such was intended. They assumed no such risk, and of course no risk attached to or consequential upon such trade. The case of Church vs. Hubbard, in the Supreme Court of the United, States, 
       is an authority decisive of this cause. An intent to trade against the laws of a country is a good cause of condemnation. Here was primé.s facie evidence of such intent, and, being yet disproved or uncontradicted, it is conclusive ; it must be taken as true. The loss arose from such an intent being discovered, and it must be suffered by the assured, the illegality of the trade not being known to the parties, and so not being within the construction of the policy. The insurance was only that the ship should arrive at her port of destination, unless she should be hindered, as was the case here, by the unlawful conduct of the assured. The condemnation being lawful, the underwriter is not held.
    
      For the plaintiff. An insurance against a forfeiture for a breach of the laws of trade in a foreign country is valid by our law. We had, then, a right to make this insurance; and the only question is, whether the language of the policy * is suf- [ * 237 ] ficient for that purpose. The undertaking is, that the ship shall arrive at Rio Janeiro; and as all trade at that place was prohibited, it must be presumed to be within the policy, unless expressly excepted. But there is no proof, in the present case, that the assured ever intended to trade, unless he could obtain a special license from the government. Indeed, it is absurd to presume it; the risk is known to be very great, and his insurance was to end in twenty-four hours after his safe arrival at Rio Janeiro. Here was, in fact, no condemnation for illicit trade, but for a mere suspicion of such an intention. But under the circumstances of this case, it was clearly the duty of the underwriter, if he did not intend to assume the risk of condemnation for illicit trade, to have guarded himself by inserting, “ this insurance is against sea-risks only,” or other like words, as is every day’s practice.
    The opinion of the Court, except the chief justice, who was formerly of counsel in the cause, was afterwards delivered by
    
      
       2 Cranch, 187.
    
   Sedgwick, J.

This is an action on a policy of insurance for 15,000 dollars, on certain goods on board the schooner Samuel, from Boston to Rio Janeiro, the goods being valued at the sum insured.

At the trial, the interest of the assured in the merchandise on board the schooner was proved ; and it was also proved that, by the laws of Portugal, all trade at that time by Americans at Rio Janeiro was prohibited ; although vessels frequently cleared out for, and went to, that port, where an illicit trade was carried on.

By the evidence, and the verdict of the jury, it appears that while the vessel was pursuing her voyage, she was obliged by misfortune and necessity to put into a Portuguese port on the Brazil coast, where she was first seized by the people of the country, and afterwards taken possession of by the governor of the district, the crew sent prisoners to Lisbon; and, although the captain and supercargo used all possible exertions therefor, neither the schooner nor the * merchandise on board has ever been [ * 238 ] restored. The property insured being in this situation, an offer to abandon it to the underwriters had been duly made. There has been no trial, nor even any prosecution for the condemnation of the vessel or cargo, before any judicial court.

There were in evidence the declarations of the Portuguese officers of the cause of the detention, — that it was because the destination was to Rio Janeiro, with an intent to carry on traffic in opposition to the laws of Portugal. But this is no evidence of the intention alleged; and if it was, it could have no tendency, in our opinion, io discharge the underwriter.

It is true that all trade, by the people of this country, at Rio' Janeiro, was, at the time the policy was underwritten, prohibited. This, it must be presumed, was then as well known to the insurers as to the assured. With this knowledge, the defendant undertakes that the merchandise insured shall be safely carried there. What was the purpose of going to Rio Janeiro we have no information.

It is true that a capture for illicit trade, or attempting it, is not insured against, unless the risk be expressly or impliedly assumed. But in this case, there is no evidence of any attempt to carry on illicit trade, nor of any intention to carry it on, unless that intention may be presumed merely from going there with a cargo; of the justness of which, and of the risk incurred by it, the underwriter could form as good a judgment then as we can now.

It has been frequently determined, and particularly, during this term, in the case of Parsons vs. The Massachusetts Fire and Marine Insurance Company, that in construing and applying a contract of insurance, the nature of the trade insured, and the circumstances under which it is to be carried on, must be taken into consideration. In this case, the defendant, knowing that it was lawful to go to Rio Janeiro, but that it was unlawful to trade there, insures that the nerchandise shall be safely transported there; and on its way it is taken, under a pretence, which is not proved, [ * 239 ] * merely of an intention to trade. This certainly cannot excuse the underwriter.

It has been alleged by the counsel for the defendant, but it is not expressed in the report, that it was not known to the underwriters, that the mere destination of the vessel to Rio Janeiro, although there may have been no intent to trade there, was contrary to the laws of Portugal, and that they ought not to be liable for a loss which proceeded from that cause. We think that this, if true, would -make no difference in the result; for if the underwriters were ignorant, so was the assured; and it is not pretended that there was a concealment of any circumstance of the intended voyage. Under these circumstances, we are clear that the insurer is liable for the loss which happened, it appearing to have been incurred entirely without the fault of the assured or his agent.

Let judgment be entered upon the verdict, with additional damages, pursuant to the agreement of the parties. 
      
      
        [Calbraith vs. Gracie, 1 Wash. C. C. R. 219. — Livingston vs. Maryland Ins. Co 7 Cranch, 506.— Ed.]