
    Ebenezer Stocker versus The Merrimack Marine and Fire Insurance Company.
    The property of a belligerent was received on board a neutral ship, under false bills of lading, purporting that it belonged to the owners of the ship, and that no freight was to be paid for it. The ship was captured, and by the Admiralty Court released. The cargo was, after time given for further proof, condemned, and no freight was awarded, as, by the bills of lading, none appeared to be due. In an action upon a policy of insurance upon the freight, it was held that the assured was not entitled to recover.
    This action was case upon a policy of insurance, subscribed by the defendants for the plaintiffs, May 7th, 1807, for 1800 dollars, on the freight of the ship Fortune, from Leghorn to Smyrna, with cotton, and at and from thence back to Leghorn; and a total loss by capture was claimed.
    On the trial upon the general issue, before the chief justice, November term, 1808, a verdict was found for the [*221 ] * plaintiff, by the consent of the parties, subject to the opinion of the Court on the following case : —
    “ The plaintiff is entitled to recover, unless the defence set up by the defendants should be a legal bar to his claim. The defence rested on two grounds — a concealment of material facts from the defendants, and the sailing of the ship with false papers when she was captured.”
    “ To support these points, it was proved, or admitted, that the plaintiff, and two other merchants of Newburyport, were the sole owners of the ship, and that they sent her into the Mediterranean, to be there employed under the directions of John Harrod, the supercargo ; that in February, 1807, at Leghorn, Harrod, having the authority aforesaid, agreed with Messrs. Franchetti, subjects of the emperor of France, then one of the powers at war, to transport for them in the said ship, from Leghorn to Smyrna, a cargo of coffee and cochineal, the same to be covered as Harrod’s sole property, by papers to be made out in his name, and also to transport back from Smyrna to Leghorn a cargo of cotton, their property, for a stipulated freight; that in March, 1807, the ship sailed from Leghorn to Smyrna pursuant to this agreement, the cargo being covered as aforesaid ; that the ship arrived and delivered her cargo at Smyrna, and for her return voyage took on board a cargo of cotton on freight, the property of the said Messrs. Franchetti; but the bill of lading on board falsely purported the cotton to belong to the owners of the ship, and that no freight was to be paid for it; that the ship sailed from Smyrna, with this cargo of cotton and false bill of lading on board, the true bill of lading being sent on by tne mail, on her return voyage, and on that voyage was captured, by a British armed ship, and sent into Malta, where the cargo, after time allowed for further proof, was condemned, and the ship was acquitted ; but the prize court refused to decree freight to the owners, because the bill of lading expressed the cargo to be the owners’ property, and that no freight was to be paid; that no information * was given to the defendants, either be- [ * 222 ] fore or at the time of effecting the policy, of the agreement of Harrod to carry on freight the property of the said Franchetti, subjects of one of the belligerent powers, or to coyer the same, from Leghorn to Smyrna, by false papers, as the property of the supercargo, or that the property of the cotton back from Smyrna was, or was not, intended to be covered by a false bill of lading, as aforesaid, on which no freight was to be paid, the same being owners’ property ; but thereof the defendants were wholly ignorant.”
    “ Now if, on these facts, the plaintiff ought to recover, the verdict is to stand ; otherwise it is to be set aside, and a general verdict for the defendants is to be entered, and judgment is to be entered accordingly.”
    The cause was argued, at the last July adjournment in this county, by Channing for the plaintiff, and Jackson for the defendants.
    
      Channing argued, 1. that the taking of the goods of a belligerent on freight, or the chartering of a ship to a belligerent, was not, in any view, illegal, or a breach of the neutral character of the ship; nor was it a circumstance of the kind or nature to require a representation of it to underwriters on a proposal for insurance. R might have come out on the inquiries of the underwriters, if they had seen fit to make such. 
    
    
      2. There was no warranty in this case, express or implied, nor any representation as to the neutrality of the ship or cargo; and in such case there is no obligation on the insured respecting the documents relating to either. 
       The opinion of Lawrence, J., in the case cited, is quoted with approbation in the case of Seaton Al. vs. Low; 
       and the same doctrine was afterwards adopted by Lord Ellenborough, in the case of Dawson & Al. vs. Atty. 
      
    
    3. The defendants have suffered nothing from the particular mode of employing the ship in this case. That the ship was acquitted is sufficient proof that the cargo was not condemned [ * 223 ] as enemy’s property covered by a neutral. * The British prize courts, always condemn the ship itself in such cases.  The cargo was detained, in this case, for further proof, and was afterwards condemned of course, such proof not being furnished within the limited time.
    4. The owners of the ship, having a legal right to charter her to a French citizen, and having done this, had no further control of her, or of those to whom she was hired, until the voyage was performed, and of course are not to suffer for their misconduct, if they were not guilty of any themselves.
    
      Jackson insisted that the case clearly shows a want of good faith in the assured, a criminal concealment of facts essentially affecting the risk. The defendants were never informed that Frenchmen were owners of the cargo, or that the bill of lading was a false one. These were important facts, for they were the very cause of the condemnation, by which the loss was incurred. There can be no need of producing authorities, to show that voyages are to be conducted in the usual course of the trade, with the common and requisite documents, and that, when this is not the case, the assured is bound to communicate it to the underwriter.
    The case of Talcot vs. M. I. Company turned wholly on the question whether the voyage had ever been commenced. The other authorities from the New York reports are not warranted by any cases or writers on marine insurance. Marshall says that, “ if the nature of the service, in which the ship is to be employed, be attended with any extraordinary danger, the concealment of it will avoid the policy.” 
    
    And he cites from Emerigon the report of a decision of the parliament of Aix precisely in support of the position he had laid down. As to the observation that the defendants suffer nothing from the particular circumstances of the voyage, — if they are held to pay this loss, so far is it from the truth, that the loss will be entirely chargeable to the plaintiff in the criminal prosecu [ * 224 ] tian of his voyage. * This misconduct was the immediate act of the plaintiff’s own agent; and, indeed, if it had been the act of those who hired the ship, the plaintiff would be equally accountable, since they must be considered as the substitutes of the owners for the voyage.
    The action standing over for advisement to this term, the opinion of the Court was now delivered by
    
      
       2 Johns. Rep. 157, Elting & Al. vs. Scott & Al. — Ibid. 130, Talcot vs. Marine Ins. Company. — 1 Caines's Rep. 217, Barnewall vs. Church. — 2 Bos. & Pul. 209, Long vs. Bolton, cited Marsh. 354.
    
    
      
       7 D. & E. 198, Christie vs. Secretan.
    
    
      
       1 Johnson's Cases, 1.
    
    
      
       7 East's R. 367.
    
    
      
       1 Rob. Adm. R. 127. —2 Rob. Adm. R. 1, 92, 161.
    
    
      
      
        Marsh. 351
    
   Sewall, J.

In this action on a policy of insurance, the plaintiff demands the sum of 1800 dollars, insured by the defendants on the freight of the ship Fortune, for a voyage from Leghorn to Smyrna, and back from Smyrna to Leghorn with cotton ; and the plaintiff avers a total loss, by a capture of the ship on her return passage with a lading of cotton. The defendants admit that the plaintiff is entitled to recovei, unless their defence prevails; which they state upon the following facts appearing in the case : —

The capture alleged was by a British armed vessel, and the cargo of cotton on board at the time was the property, and had been taken on freight for the account and risk of Messrs. Franchetti, merchants of Leghorn, upon an agreement with them by the supercargo of the ship; they being subjects of the emperor of France, then at war wdth Great Britain. This cargo was disguised and covered, as the property of the owners of the ship, by false bills of lading, and papers made out pursuant to the said agreement. The British prize court at Malta, where the ship was carried by the captors, acquitted the vessel, and, after allowing further time for proof, condemned the cargo, and refused to decree any freight to the owners, for this reason assigned in the sentence — that the bills sf lading expressed the cargo to be the owners’ property, and that no freight was to be paid. It also appears that no notice of the said agreement to carry the goods of the subjects of a belligerent power, or of an intention to cover property taken on freight by false bills of lading, was given to the underwriters, when the policy in question was effected.

* It is contended that the defendants are not liable for [ * 225 j the loss demanded, 1st, because facts and circumstances material to the risk were concealed by the plaintiff, when he effected his insurance; and, 2dly, because the loss happened by the misconduct of the plaintiff, or his agent.

The employment in which a vessel is to be engaged, when attended with any extraordinary hazard, must always be material to the risk ; and if this be known to the assured, and the extraordinary circumstances are not suggested by the description of the voyage, the concealment will avoid the policy. I say, if known to the assured ; for then, in omitting to represent the extraordinary risk, whether he acted under an apprehension that it is not material, or from inattention, or from motives injurious to the underwriter, the concealment being of a circumstance which proves to have been material, the policy will be avoided.

On the other hand, when the circumstance from which an extraordinary risk may be apprehended, was not known to the assured, or he knew only what was sufficiently suggested by the description of the risk insured, and there has been no misrepresentation respecting it, the underwriter cannot avoid his contract upon tile objection of a material concealment. Against circumstances within the risk described, which may or may not happen, but which, happening, are attended with an extraordinary degree of hazard, the underwriter may guard himself by his inquiries, or by stipulations restricting the risk he undertakes; and when he neglects these precautions, he must be understood to waive his right to further information, and to undertake against all the events and accidents of the voyage insured.

The neutral character of a vessel, and her lading, is a circumstance very important in estimating the risk upon a voyage to be performed, in a time of war, within the neighborhood of the belligerents ; but the sole tendency being to lessen the risk, a [ * 226 ] representation of it is not requisite * to the validity of the policy. This fact is understood by the parties, and is necessarily inferred, where the insurance is made by the citizen of a neutral state, resident there, of his own property; and without any express representation or warranty, the assured impliedly engages to preserve his property, and to conduct the voyage insured, in a neutral condition and character, to which alone the insurance applies. But where the insurance is of the freight only of a neutral vessel, it is not a necessary inference, nor is there any implied engagement, that the cargo carried in her shall be neutral; for a neutral vessel may be lawfully employed in carrying a cargo which is the property of a belligerent. And in that case, when the voyage insured commences in a foreign country, under a supercargo, who is at liberty to take the property of neutrals or belligerents, as he can find employment, the assured may be innocently silent, especially when he is not questioned, upon the mere probability of the event. But when the assured has had intelligence, which shows the risk to be under circumstances the most unfavorable to underwriters, and at the time the policy is effected it is known to the assured that his vessel is employed in carrying a cargo which is not neutral property, and especially if it is not known that the master or supercargo, in the charge of the vessel, had undertaken to disguise the national character of the cargo by false papers, — intelligence of this nature certainly ought to be disclosed. The concealment of it is injurious to the underwriter, and his neglect to inquire may be considered, rather a confidence in the integrity of the assured, than a waiver of his right to information so important in estimating the risk to be insured.

In the case at bar, freight was insured as the property of the plaintiff, a citizen of the United States, upon a vessel, of which he and other merchants of Newburyport, likewise citizens, were sole owners ; and, therefore, in the understanding and * im- [ * 227 ] plied intentions of the parties in this policy, it was an insurance upon a vessel of the United States.

But there was nothing in the contract, which restricted the assured to the freight of a neutral cargo ; nor was he, in this respect, restrained by any rule of municipal or public law. And if, when the policy was effected, the insured was without any conclusive ' intelligence as to the particular employment in which his vessel was engaged, his silence upon that subject was innocent. It was not requisite to the validity of his contract, that he should particularly inform the underwriters of the probability of an event within the description of the voyage insured. If he was not without intelligence, and the employment was known to the assured, including especially the agreement of his supercargo to cover the property of a belligerent by false papers, this certainly ought to have been disclosed. Such intelligence was material in estimating the risk, and the concealment of it was injurious to the underwriters, who might justly avoid a contract thus obtained. It is not necessary to be more explicit upon this ground of the defence, as it does not appear from the facts stated, that the assured had intelligence of the agreement, of the freight, between the supercargo of the ship and Messrs. Franchetti, when the policy was effected; and upon the other ground of the defence there is no doubt.

Without any representation or warranty, the neutral ownership and character of the vessel, upon which the freight was insured, was constructively a circumstance in this contract understood by the parties; because it was a fact which, from the very nature of the contract, could not have been overlooked, or considered immaterial, in estimating the risk. The papers and documents which a vessel of the United, States is required to have, that course of conduct which a vessel navigated under the protection of a neutral flag is required to observe, either by particular treaties, or the rules of public and national law, were, by a necessary implication, although tacitly, engaged on * the part of the assured. [ * 228 ] This is the doctrine expressly recognized in the case of Christie vs. Secretan, although not enforced in that case upon the facts stated ; and it is, indeed, a particular application of this Well-known principle, by which contracts of insurance are regulated, that the ship or property assured is to be navigated, con- < ducted, and managed, according to law ; and whether this principle 1 is enforced as an implied condition of the policy, or more reasonably, perhaps, (according to the opinion intimated by Justice Lawrence in the case cited,) as an engagement of the assured, which shall prevent him from recovering a loss incurred by the negligence or misconduct of himself or his agent, is not important to this decision.

In the application of this rule, certain events, or events within the policy happening under certain circumstances, attributable to the negligence or misconduct of the assured, are necessarily excepted from the contract of insurance, which regards events, the effects of inevitable perils, or of a superior force, not to be prevented by human foresight.. For losses thus incurred, the assured may justly claim an indemnity; but not for losses incurred, if I may use the expression, in his own wrong, by the failure of a contrivance, or, as it would be styled in the jurisdiction of a belligerent nation against whom it was directed, a fraud, of which the agent of the assured took the hazard; and for his conduct the assured is responsible.

Upon this ground, we are of opinion that the defendants must prevail in the case at bar. The freight was lost, not by any unavoidable consequence of the capture alleged, for the vessel was acquitted, notwithstanding the condemnation of the cargo : yet the freight was refused ; and this reason assigned, that the bills of lading represented the cargo to be owners' property, and that no freight was to be paid. This was a false representation of the nature of the lading, and an intended deception; and the transaction throughout was a departure from that cójiduct, which, by [ * 229 ] principles of public and national law, * those who have the charge of a vessel sailing under the protection of a neutral flag are bound to observe. The direct causes of the loss, therefore, was not a casualty or event within the contract of insurance, but a violation of the implied engagement of íhe assured, that the vessel and voyage, upon which freight was insured, should be conducted according to law. \

Pursuant to the agreement of the parties, the verdict taken in this case must be set aside, and a general verdict entered for the defendants. 
      
      
        Marshall, 351, 352. —1 Emerig. 172.
     
      
      
         5 D. & E. 192. — Marsh. 385, 387.
     