Goicoechea v. Louisiana State Insurance Co.

Pouter, J. delivered the opinion of the court. This suit was instituted on a policy of . . . , , , msurance on goods on board the schooner Isaac MiKim, from Havana, in the Island 7 7 Cuba, to Soto la Marina, in the republic Mexico. The policy contains a warranty that — 52 — the insurers are to be “ free from any charge, damage, or loss which may arise in conse- . . ¾1101106 °* engagmg, °r having been engaged, in illicit or prohibited trade, at any time whatsoever.” The property insured is represented to be Spanish, and the premium paid is five per cenft Written parts or a poSe that'»re where'er written and prim' .iw 'rds ea° strument must be eon-strued lh where the decoration in cerwSn pío-perty insured belongs fi a country at where'ihethat ship is bound to, an i it also contains a warranty against any from^ihclt* íureM we not fci aio.» pro ceeding frsm the i*ttor. The schooner, on approaching the port of Soto la Marina, was taken possession of by an armed vessel belonging to the Mexican government. Proceedings were instituted against in a court of justice, and she and her car-rr0 were condemned. The grounds of condemnation, as stated in the opinion of the assessor and the final decree of the court, are, that the cargo belonged . . to the Spaniards; that it was the produce of 1 1 Spain; and that the schooner sailed from an ⅜ enemy s port. Some of the causes ot condemnation being m jure belli, and others a breach of municipal law, the question has been raised, and very fully argued, whether the defendants are pro-J tectcd by the warranty in the policy against illicit trade. In the case of Cucullu vs. the present de — 53 — fendants, which lately underwent so much cussion in this court, the judgment rendered went on the idea, that if there was a breach of warranty, no matter whether that breach was or was not the cause of condemnation and loss, the assurers were discharged. By our law, warranties in policies of insurance are of two kinds, affirmative, or promissory, and they are considered in the nature of a condition precedent. That is, on the falsehood of the affirmative, or the non-performance of the executory stipulation, the contract becomes void, and is incapable of producing any obligation between the parties. The lex mercatoria of the continent of Europe has adopted the same principles, with this difference, perhaps, that there, a substantial compliance with the warranty is sufficient, while here it must be strictly, or, according to some, literally performed. Hence it follows, that as soon as a breach of the warranty is established, it is immaterial to enquire, whether the loss was occasioned by it or not; for the insured having failed to comply with the condition on which the insurer agreed to bind himself, the latter ⅛ discharged from all responsibility. Condy's Marshall. 348, 349, 436, 452, Park on In — 54 — surance, 422; Philips, on Insurance, 127; Emerigon, No. 1, cap. 6, sec. 4, 164 a 168; Pothier on Ass. No. 199; Bonlay Paty Cours de Droit Commercial, vol, 3, sec 15, 507 a 510; Code de Com. Franc, art. 348. It is unnecessary for'us, therefore, to go into an examination of the point so much discussed at the bar, whether the breach of municipal law, or the violation of the rights of Mexico as a belligerent, was the principal cause of condemnation. Whether the sentence shews the one or other is immaterial, provided it shews there was a breach of the warranty. Thafit does, there cannot be a doubt. The decree condemns the goods, because they are enemy’s property, and because*they are about to be introduced in violation of municipal law* The last cause of condemnation proves that the insured did not comply with his warranty, and as that is a condition precedent to his right of recovery, he cannot succeed in this action. See 3 Burrows, 1419. But the plaintiff contends that however correct súch a doctrine may be in an ordinary case, the rule cannot apply here, because the terms of the contract do not authorise it. — 55 — The policy is in the usual form. Immedi-r J ately after the clause of warranty against illi- * cit trade, which makes a part of the printed r , r instrument, there is written, “ this insurance is declared to be on 74 boxes of white wax, marked S. C. valued at 7000 dollars, represented to be Spanish property.” These expressions being written,it is argued they must controul that part of the policy which is printed; and, therefore, the assurers are responsible, as, by the contract, they were informed the assured was about to embark on an illicit trade, and with that knowledge took the risk. The high premium paid is offered as another argument in support of this construction. The rule invoked by this argument, that the written parts of the policy should controul those that are printed, is correct, because the written words are the immediate language and terms státed by the parties themselves, for the expression of their meaning, and the printed ones, a general formula, made for all cases that may be presented. But the rule cannot properly receive an application in cases other than those where the written and printed words $0 contradict each other that the one must — 56 — yield to the other. Where they do not, the J principle must necessarily be subordinate to , 1-11 ,. f, . , another, to which the policy ot insurance and all other contracts are subject in their interpretation, viz: that every part of them should have effect, if possible. This is a fundamental rule of construction, to which we do not, at this moment, recollect an exception, and it is founded on the plainest of reasons, namely; that it cannot be supposed that terms to which a meaning can be given, and which have an mportant bearing on the interests of the parties, were inserted or left in the contract, for no purpose. Civil Code, 270, art. 57; Pothier on Ob. no. 92: 1 Burrowes, 282. The position, therefore, assumed by the plaintiff, will not bear the application of this principle. It is true, the insurers underwrote a policy which, among other risks, presented that of an illicit trade, but, at the same time, they declared that they would not assume the latter risk, and that he would take it on himself Now, if we should say, that the representation of the property being Spanish, and that it was to be carried from an enemy’s port to Soto la Marina, makes the insurers responsible for a breach of municipal law, then the — 57 — clause that the assured would take the risk illicit trade means nothing. If, on the . , „ .. „ , ry, we give to this warranty its lull effect, and say that the assurers were not to take that risk, we do not destroy that part of the policy which declares that the property was Spanish, and was to be carried from an enemy’s port; because we still leave, as a subject for the contract to operate on, all other risks of the sea, and those proceeding from the war existing between Mexico and Spain. The latter interpretation is, therefore, that which the court is compelled to adopt, for by it we give effect to both clauses of the contract; by the other we would destroy one of them. We have been referred by the counsel for the plaintiff, to a case decided in the circuit court of the U. S. for Pennsylvania, and a nisi prius decision in New York, where it was held, that when the insurer knows the cargo which he underwrites to be prohibited, he is not protected by the warranty that he is not to be responsible for illicit trade. No reason is given in either of these cases, why, on a voyage of this kind, the underwriter may not agree to take sea or war risks, and refuse those arising from seizure for illicit trade, and wc are totally — 58 — at a logs to conceive on what grounds suckRH * ‘ . . opinion can rest. Admitting that he is bound» t0 know municipal regulations of the country to which the goods are carried, he may certainly refuse to be answerable for a violation of them. Nothing prevents the parties to a contract of insurance from dividing the risks; the assurer may take all, or any portion as he thinks fit. These decisions, however, are in direct opposition to that given in the case of Hubbard, vs. Church, in the supreme court of the United States, and to that of Higgins, vs. Pomeroy, in the supreme court of Massachusetts. 2 Cranch, 232, 11 Mass. 104, 1 Condy's Marshall, 346. 1 Anthon, 26. Grymes for the plaintiff, Eustis for the de*-fendant. It is therefore ordered, adjudged and decreed that the judgment of the district court be affirmed with costs.