was held, that the premium should not be delivered back. loss of the ship at the time of effecting the policy. The to insure. It counsel for the plaintiff were under the necessity of admitting that their client had made some fraudulent insurances upon this very ship, subsequent to the one now in dispute, but contended that the news of the loss of the ship had not arrived till after this particular one was made. The evidence, however, was so strong as easily to convince the jury that the plaintiff had received information of the loss before the order for making the insurance was given to the broker; and they found a verdict for the defendant. Lord Mansfield said,-" The fraud was so gross, that the premium should not be recovered from the underwriter." At last this great question came to be expressly decided in the case of Chapman and Others v. Fraser (a), where the agent of the assured only had been the guilty person, and the whole Court of King's Bench were of opinion, that in all cases of actual fraud on the part of the assured or his agent, the underwriter might retain the premium. If a policy be avoided on account of a misrepresentation made without any fraud, the assured is entitled to a return of premium (Feise v. Parkinson) (b). It is to be observed that it has been laid down as clear law that, if the underwriter has been guilty of fraud, an action lies against him, at the suit of the insured, to recover the premium. Thus it was said by Lord Mansfield, in the case of Carter v. Boehm (c), which has already been quoted at large in this section:-" The policy would be void against the underwriter if he concealed anything; as, if he insured a ship on her voyage, which he privately knew to be arrived, and an action would lie to recover the premium." In all cases of the part of the actual fraud on assured, the premium shall not be deliver ed back.. Otherwise where a policy is voided by a misrepresentation without actual fraud. If the under writer has been guilty of fraud, against him nances fraud By several of the foreign ordinances the punishment of By several fraud in matters of insurance is exceedingly severe. By those foreign ordiof Amsterdam it is declared, "That as contracts of insurance in matters of insurance is are contracts of good faith, wherein no fraud or deceit ought the subject of (a) B. R. Trin. 33 Geo. 3. Park Ins. 456. (b) 4 Taunt. 640. (c) 3 Burr. 1909. criminal pnnishment. to take place, in case it be found that the insured or insurers, captains, shippers, pilots, or others, used fraud, deceit, or craft, they shall not only forfeit by their deceit and craft, but shall also be liable to the loss and damage occasioned thereby, and be corporally punished for a terror and example to others, even with death, as pirates and manifest thieves, if it be found that they have used notorious malversation or craft" (a). The ordinances of Middleburg contain a provision exactly in the same words. At Stockholm, also, it has been declared that such an offender, besides restitution to the party injured, shall, according to the circumstances of every particular affair, be punished in his estate, honour, and life (b). Frauds in contracts of insurances have not as yet had any punishment affixed to them by the laws of England, that I have been able to learn; but there are one or two cases which have been declared to be felonious by positive statutes where the act committed has been to the prejudice of the underwriters (c). SECTION II. OF ILLEGAL VOYAGES. Where an insurance is made on a voyage expressly prohibited by the common, statute, or maritime ALTHOUGH a great deal has been said in the preceding part of this Treatise of voyages in general, nothing has been said about any illegality that might affect the voyage and render it void. I shall, therefore, in this section, proceed to show that in many instances a voyage which is prohibited by the law, the policy laws of the country, renders every insurance on it void, and the policy of no effect. And the rule is this, "that whenever an insurance is made on a voyage expressly prohibited by the common, statute, or maritime law of the country, the policy is of no effect. The principle upon which such a regulation is is void. (a) Ord. of Amsterdam, art. 56; 2 Mag. 146. (b) Art. 30; 2 Mag. 76; 2 Mag. 288. (c) See 1 Vict. c. 99, s. 6, ante, p. 346. founded, is not peculiar to this kind of contract; for it is nothing more than that which destroys all contracts whatsoever that men can never be presumed to make an agreement forbidden by the laws; and if they should attempt such a thing, it is invalid, and will not receive the assistance of a Court of Justice to carry it into execution" (a). 1. The most material case upon this point is that of Johnston v. Sutton (b), which came on to be argued in the year 1779, and received the solemn opinion of the Court of King's Bench. surance was made upon a cargo of goods exported to New York in vention of an direct contra act of Parlia ment. Held, that the insurance was void, and the underwriter not liable. It was an action on a policy of insurance on goods, on Where an inboard the ship Venus, "lost or not lost, at and from London to New York, warranted to depart with convoy from the channel for the voyage." The cause was tried before Lord Mansfield, at Guildhall, and a verdict was found for the plaintiff. The defendant obtained a rule to show cause why there should not be a new trial. The facts, upon his Lordship's report, appeared to be these:-The ship was cleared for Halifax and New York. She had provisions on board, which she had a license to carry to New York, under a proviso in the prohibitory act of 16 Geo. 3, c. 5. But one-half of the cargo, including the goods, which were the subject of this insurance, was not licensed, and was not calculated for the Halifax market, but for New York. There had been a proclamation by Sir William Howe to allow the entry of unlicensed goods at New York; and though there were bonds usually given at the Custom House here, by which the captain engaged to carry the goods to Halifax, those bonds were afterwards cancelled, on producing a certificate from an officer appointed for that purpose at New York, declaring that they were landed there. The commander-in-chief had no authority under the act of Parliament to issue such proclamation, or to permit the exportation of unlicensed goods. The Venus was taken in her passage to New York by an American privateer. The first section of the statute prohibits all commerce with Where an insurance was made in direct contravention of the exclusive right of trading granted to the East India Company by 9 & 10 Wm. 3, c. 44, the underwriters were held to be discharged. the province of New York, (amongst others), and confiscates all ships and their cargoes which shall be found trading, or going to or coming from trading with them (a). In section the second there is a proviso, excepting ships laden with provisions for the use of his Majesty's garrisons or fleets, or for the inhabitants of any town possessed by his Majesty's troops, provided the master shall produce a license specifying the voyage, &c., and the quantity and species of provisions; but by the same proviso it is declared, that goods not licensed, found on board such ship, shall be forfeited. After argument, the motion for a new trial, upon Lord Mansfield said "The whole of the plaintiff's case goes on an established practice, directly against an act of Parliament. If the defendant did not know that the goods were unlicensed, the objection is fair as between the parties. If he did, he would not deserve to be favoured. But, however that may be, it was illegal to send the goods to New York, and, in pari delicto, potior est conditio defendentis. It is impossible to bring this within the cases cited (b), because here there was a direct contravention of the law of the land.” The rule for a new trial was made absolute. Upon the same principle it was that in the cause of Camden and others v. Anderson (c), which was long contested in the Court of King's Bench, and afterwards upon a writ of error in the Exchequer Chamber, the underwriters were held not liable, the insurance in that case being made in direct contravention of the exclusive right of trading granted to the East India Company by stat. 9 & 10 Wm. 3, c. 44, s. 81, and which exclusive right had never for one moment been suspended, nor had that statute ever ceased to be an existing law. Indeed the principle which destroys all insurances made on ships proceeding on illegal voyages, never was contested at the Bar in the argument of the above cause; but only the (a) 16 Geo. 3, c. 5. (b) These were cases of insurances on ships trading contrary to the revenue laws of foreign coun tries, of which more will be said hereafter. (c) 6 T. R. 723; 1 B. & P. 173. i application of it to the particular case, on account of various statutes which had been passed and repealed, and on account of a clause in a more modern statute, which it was supposed precluded the underwriters from setting up this defence (a). But no man attempted to argue that that which is unlawful, and a public wrong, could be the ground of an action. a country and America, the United States are permitted to trade with the British India. And valid, though it from America to India, but circuitous through ano be not direct ther country, and although the parties interested in the insurance are 2. Soon after the above decision, a case of Wilson v. Mar- By a treaty ryat (b), arose, in which the rights of the East India Com- between this pany, as far as they were affected by the treaty between this country and America, came to be discussed in an action on policy of insurance. By the 13th article of that treaty, which was confirmed by stat. 37 Geo. 3, c. 97, s. 22, the United territories in States of America are permitted to trade to and from the a British territories in India. But it was contended, notwith- legal, and an insurance on it standing the treaty and statute, that the insurance in question was upon an illegal voyage, being "at and from Bourdeaux to Madeira and the East Indies, and back to America," whereas the treaty meant to tolerate no other trading than a direct one between America and the East Indies: and also it was insisted, that Butler and Collet, the persons for whose benefit this insurance was effected, were not entitled to the benefit of the treaty, they being natural-born subjects of this country, but one of whom, after the ratification of American independence, had gone with his wife and family to reside in America, has America, and ever since been domiciled there, and received as a citizen of entitled to the the States of America, and the other of whom was resident benefit of the and domiciled in America before the independence of that country, and has continued to be resident and domiciled there and because their agent, the plaintiff, when he shipped the goods, and when he caused the policies to be effected, was resident in, and a subject of Great Britain, and knew that the ship was destined for the British territories in India. The special verdict in this case was three times argued in the King's Bench, and once in the Exchequer Chamber; and the learned Judges composing both those Courts, were (a) 33 Geo. 3, c. 52, s. 150. Park Ins. 499. (b) 8 T. R. 31; 1 B. & P. 430. natural born subjects of this country but residing and domiciled in therefore treaty. |