Kohne v. Insurance Co. of North America

| U.S. Circuit Court for the District of Pennsylvania | Apr 15, 1804

WASHINGTON, Circuit Justice

(charging jury). The first objection to this action was not much relied upon by the defendant’s counsel, and there is certainly nothing in it. There is no charge of unfairness on the part of .the agent of the plaintiff; nor is it pretended that he knew of the loss on the 12th, when he waited upon the president of the insurance company. It appears that every thing was agreed upon; and although on account of the fever then in the city, he did not wait to receive the policy; yet it was immediately after he left the office filled up and signed by the president, and has been produced on the trial. The contract therefore was not inchoate, but perfected, before notice of the capture by either of the parties. The objections to the recovery relied upon are, a material misrepresentation, and a concealment of two facts material to the risk. The misrepresentation is stated to be in respect to the commencement of the voyage. It must be admitted, that there was a misrepresentation; but unless it was material to the risk, it is not sufficient to avoid the policy. I cannot perceive what consequence it was to the underwriters, to be informed whether the voyage commenced at Charleston or at Newport The cargo was put on board at Newport in good order, and the insurers were free of average; which was not the case in Hodgson and Richardson. Besides, that case turned upon a usage proved on the trial, that if the insurance was effected in the middle of a voyage, it was necessary to disclose the circumstance. In this case no such usage has been proved.

The next objection is, concealment of the injury the vessel sustained from Charleston to Newport. The matter for the jury to decide on is, whether, at the time the risk commenced, the vessel deserved the ■ character given of her. If the jury should be of opinion that she did, the accident that happened to her in her voyage from Charleston, does not, to the court, seem material.

The last and most important objection, remains to be considered. It is, that the defendant should have disclosed the importation from Laguira to Charleston, and the not landing of the cargo. A great deal has been said of the rights of neutral nations; and the principle contended for by the British government, has been pronounced repugnant to the laws of nations. I mean not to enter into the consideration of this question, because, whether the principle asserted by the British government and practised by its courts, be authorized or not by the laws of nations; yet the consequence to neutrals is the same. If they act improperly, the matter must be adjusted between that and our nation; but as to the individuals of our nation, they certainly incur a risk if they trade in contravention of the rule thus established, whether it be right or wrong.

The principle contended for is, that neutral nations shall not trade directly, in time of war, from the colonies of one of the belligerent powers in Europe, unless to the nation to which the neutral belongs, or carry on a trade from such colonies to the mother country, in time of war, which in time of peace is interdicted. The first branch of the question then is; if the concealment was material to the risk, was the plaintiff bound to disclose it, or was the insurer to ask for information? An insurance is a contract of indemnity, and the assurer agrees to stand in the place of the assured, and to take the risk upon himself. It is therefore necessary that the latter should possess the former with a knowledge of every fact with which he is acquainted, material to the risk, that he may know how to estimate the premium. If a foreign regulation, which may affect the risk, be known only to the insurer, he must ask for information. But if known also to the assured, it is his duty to state such facts as may be material, to enable the insurer to see the extent of the hazard to which such regulation exposes him. The absurdity, stated in argument, if the assured should be obliged to inform himself of all the various regulations of the different belligerent powers which may endanger his property, is not greater than to lay the same burden on the shoulders of the insurer. But in neither case does the principle apply, unless such regulations be public and generally known, or if not so, can be proved to have been known by one party and not by the other: in which case, the assurer, if he only knows of it, must take the risk upon himself; and if known only to the assured, it is a fraud if he does not disclose it.

The second branch of the question is, was the nature of the cargo, and the not landing it at Charleston, material to the risk; or in other words, was there a bona fide importation into Charleston, to avoid the charge of a direct trade from Laguira to Spain? This must depend upon the evidence. It is clear, that if the vessel had merely called at Charleston, the circumstance of stopping there would not have amounted to an importation into that place. The cases cited from Robinson’s Reports, admit that paying duties and landing, are prima facie evidence of a bona fide importation; but these are only circumstances, which may be repelled by other evidence, showing that the importation was not bona fide; and I confess I cannot see why the paying duties may not afford satisfactory evidence of a bona fide importation, if other circumstances concur to prove it so; though the case is certainly not so strong as if the cargo were landed. The evidence relied upon to prove that this was a direct trading, from a colony of Spain to the mother country, is certainly very strong. The passport to Laguira; the passport from thence to Charleston; the permission not to land, upon the ground that this is usually granted where the cargo is intended to be re-exported for benefit of drawback; the passport and certificate of the Spanish consul at Charleston, found amongst the papers, and describing the cargo as coming from Laguira, and intended for Spain; afford evidence of the original destination of the cargo, very difficult to be reconciled with the assertion of a bona fide importation into Charleston. If the jury, upon that evidence, are of opinion, that the calling at Charleston, and paying or bonding the duties, under all the circumstances of this case; were with a view to proceed on to Spain, or to land some of the cargo and take in other articles; it will be very difficult to maintain the argument, that the circumstances were immaterial to the risk, and in that case their verdict ought to be for the defendants.

The jury found for the plaintiff.

[The verdict in this case was set aside as contrary to evidence, and a new trial awarded. Case No. 7,921. upon the new trial there was verdict and judgment for the defendant. Case No. 7,922.]