Olivera v. Union Insurance Company
Annotate this Case
16 U.S. 183 (1818)
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U.S. Supreme Court
Olivera v. Union Insurance Company, 16 U.S. 3 Wheat. 183 183 (1818)
Olivera v. Union Insurance Company
16 U.S. (3 Wheat.) 183
ERROR TO THE CIRCUIT COURT
FOR THE DISTRICT OF MARYLAND
A vessel within a port, blockaded after the commencement of her voyage, and prevented from proceeding on it sustains a loss by a peril within that clause of the policy insuring against the "arrests, restraints, and detainments of Kings," &c., for which the insurers are liable, and if the vessel so prevented be neutral, having on board a neutral cargo laden before the institution of the blockade, the restraint is unlawful.
A blockade does not, according to modern usage, extend to a neutral vessel found in port nor prevent her coming out with the cargo which was on board when the blockade was instituted.
A technical total loss must continue to the time of abandonment. Quaere as to the application of this principle to a case where the loss was by a restraint on a blockade, and proof made of the commencement of the blockade, but no proof that it continued to the time of the abandonment.
On 29 December, 1812, the plaintiffs, who are Spanish subjects, caused insurance to be made on the cargo of the brig called the St. Francis de Assise "at and from Baltimore to the Havana." Beside the other perils insured against in the policy according to the usual formula were "all unlawful arrests, restraints, and detainments of all Kings," &c. The cargo and brig were Spanish property and were regularly documented as such. The vessel sailed from Baltimore and was detained by ice till about 8 February, 1813, when, being near the mouth of the Chesapeake Bay, the master of the brig discovered four frigates, which proved to be a British blockading squadron. He however endeavored to proceed to sea. While making this attempt he was boarded by one of the frigates, the commander of which demanded and received the papers belonging to the vessel, and endorsed on one of them the words following:
"I hereby certify that the Bay of Chesapeake and ports therein are under a strict and rigorous blockade, and you must return to Baltimore, and upon no account whatever attempt quitting or going out of the said port."
The brig returned, after which the master made his protest and gave notice to the agent of the owners in Baltimore, who abandoned "in due and
reasonable time." The underwriters refused to pay the loss on which this suit was brought. It appeared also on the trial that the vessel had taken her cargo on board and sailed on her voyage before the blockade was instituted. On this testimony the plaintiff's counsel requested the court to instruct the jury that if they believed the matters so given to them in evidence, the plaintiffs were entitled to recover. The court refused to give this instruction, and the jury found a verdict for the defendants, the judgment on which was brought before this Court on a writ of error.
MR. CHIEF JUSTICE MARSHALL delivered the opinion of the Court, and after stating the facts proceeded as follows:
On the part of the plaintiff in error it has been contended that the assured has sustained a technical total loss by a peril within that clause in the policy which insures "against all unlawful arrests, restraints, and detainments of Kings," &c.
He contends 1st that a blockade is a "restraint," of a foreign power; 2d, that on a neutral vessel with a neutral cargo laden before the institution of the blockade, it is "an unlawful restraint."
The question whether a blockade is a peril insured against is one on which the Court has entertained great doubts. In considering it, the import of the several words used in the clause has been examined. It certainly is not "an arrest," nor is it "a detainment." Each of these terms implies possession of the thing by the power which arrests or detains, and in the case of a blockade, the vessel remains in the possession of the master. But the Court does not understand the clause as requiring a concurrence of the three terms in order to constitute the peril described. They are to be taken severally, and if a blockade be a "restraint," the insured are protected against it although it be neither an "arrest" nor "detainment."
What, then, according to common understanding, is the meaning of the term "restraint?" Does it imply that the limitation, restriction, or confinement must be imposed by those who are in possession of the person or thing which is limited, restricted, or confined, or is the term satisfied by a restriction created by the application of external force? If, for example, a town be besieged and the inhabitants confined within its walls by the besieging army, if in attempting to come out they are forced back, would it be inaccurate to say they are restrained within these limits? The Court believes it would not, and if it would not, then with equal propriety may it be
said, when a port is blockaded, that the vessels within are confined or restrained from coming out. The blockade force is not in possession of the vessels enclosed in the harbor, but it acts upon and restrains them. It is a vis major, applied directly and effectually to them, which prevents them from coming out of port. This appears to the Court to be, in correct language, "a restraint" of power imposing the blockade, and when a vessel, attempting to come out, is boarded and turned back, this restraining force is practically applied to such vessel.
Although the word as usually understood would seem to comprehend the case, yet this meaning cannot be sustained if in policies it has uniformly received a different construction. The form of this contract has been long settled, and the parties enter into it without a particular consideration of its terms. Consequently no received construction of those terms ought to be varied.
It is, however, remarkable that the industrious researches of the bar have not produced a single case from the English books in which this question has been clearly decided. In the case of Barker v. Blakes, which has been cited and relied on at the bar, one of the points made by the counsel for the underwriters was that the abandonment was not made in time, and the court was of that opinion. Although, in this case it may fairly be implied from what was said by the judge that a mere blockade is not a peril within the policy, still this does not appear to have been considered, either at the bar or by the bench, as the direct question in the cause, nor was it expressly decided. The opinion
of the court was that the blockade constituted a total loss which was occasioned by the detention of the vessel, but that the abandonment was not made within reasonable time after notice of that total loss. In forming this opinion, it had not become necessary to inquire whether the blockade, unconnected with the detention, was in itself a peril against which the policy provided. The judgment of the court could not be in the most remote degree influenced by the result of this inquiry, and consequently it was not made with that exactness of investigation which would probably have been employed had the case depended on it. It is also to be observed that the vessel did not attempt to proceed towards the blockaded port, but lay in Bristol when the abandonment was made. The blockading squadron therefore did not act directly on the vessel, nor apply to her any physical force. It is not certain that such a circumstance might not have materially affected the case. This Court therefore does not consider the question as positively decided in Barker v. Blakes.
The decisions of our own country would be greatly respected were they uniform, but they are in contradiction to each other. In New York it has been held that a blockade is, and in Massachusetts that it is not, a peril within the policy. The opinions of the judges of both these courts are on every account entitled to the highest consideration. But they oppose each other, and are not given in cases precisely similar to that now before this Court. The opinion that a blockade was not a restraint was held by the courts of Massachusetts, but was expressed by the
very eminent judge who then presided in that court in a case where the vessel was not confined within a blockaded port by the direct and immediate application of the physical force to the vessel herself.
Believing this case not to have been expressly decided, the Court has inquired how far it ought to be influenced by its analogy to principles which have been settled.
It has been determined in England that if the port for which a vessel sails be shut against her by the government of the place, it is not a peril within the policy. In Hadkinson v. Robinson, a vessel bound to Naples was carried into a neighboring port by the master in consequence of information received at sea that the port of Naples was shut against English vessels. In an action against the underwriters, the jury found a verdict for the defendants, and on a motion for a new trial the court said
"a loss of the voyage to warrant the insured to abandon must be occasioned by a peril acting upon the subject matter of the insurance immediately, and not circuitously, as in the present case. The detention of the ship at a neutral port, to avoid the danger of entering the port of destination cannot create a total loss within the policy, because it does not arise from any peril insured against."
It will not be denied that this case applies in principle to the case of a vessel whose voyage is broken up by the act of the master on hearing that his port of destination is blockaded. The peril acts directly on the vessel not more in the one case than in the other. But if, in attempting to pass the blockading
squadron the vessel be stopped and turned back, the force is directly applied to her, and does act directly and not circuitously.
Without contesting or admitting the reasonableness of the opinion that the loss of the voyage occasioned by the detention of the ship by her master in a neutral port is not within the policy, it may well be denied to follow as a corollary from it that a vessel confined in port by a blockading squadron, and actually prevented by that squadron from coming out, does not sustain the loss of her voyage from the restraint of a foreign power, which is a peril insured against.
Lubbock v. Rowcroft, which was decided at nisi prius, is in principle no more than the case of Hadkinson v. Robinson. Having heard that his port of destination was blockaded by or in possession of the enemy, the master stopped in a different port and the insured abandoned. The loss was declared to be produced by a peril not within the policy. It is unnecessary to repeat the observations which were made on the case of Hadkinson v. Robinson.
An embargo is admitted to be a peril within the policy. But as has been already observed, the sovereign imposing the embargo is virtually in possession of the vessel, and may therefore be said to arrest and detain her. Yet in fact the vessel remains in the actual possession of the master or owner, and has the physical power to sail out and proceed on her voyage. The application of force is not more direct on a vessel stopped in port by an embargo than on a vessel stopped in port by a blockading squadron. The danger of attempting to violate a blockade is as
great as the danger of attempting to violate an embargo. The voyage is as completely broken up in one case as in the other, and in both the loss is produced by the act of a sovereign power. There is as much reason for insuring against the one peril as against the other, and if the word "restraint" does not necessarily imply possession of the thing by the restraining power, it must be construed to comprehend the forcible confinement of a vessel in port and the forcible prevention of her proceeding on her voyage. If so, the blockade is in such a case a peril within the policy.
The next point to be decided is the unlawfulness of this restraint.
That a belligerent may lawfully blockade the port of his enemy is admitted. But it is also admitted that this blockade does not, according to modern usage, extend to a neutral vessel found in port, nor prevent her coming out with the cargo which was on board when the blockade was instituted. If, then, such a vessel be restrained from proceeding on her voyage by the blockading squadron, the restraint is unlawful. The St. Francis de Assise was so restrained, and her case is within the policy.
It has been contended that it was the duty of the neutral master to show to the visiting officer of the belligerent squadron his right of egress by showing not only the neutral character of his vessel and cargo, but that his cargo was taken on board before the institution of the blockade.
This is admitted, and it is believed that the bill of exceptions shows satisfactorily that these facts were proved to the visiting officer. It is stated that the
vessel and cargo were regularly documented, that the papers were shown, and that the cargo was put on board and the vessel had actually sailed on her voyage before the institution of the blockade.
There is, however, a material fact which is not stated in the bill of exceptions with perfect clearness. The loss in this case is technical, and the court has decided that such loss must continue to the time of abandonment. * It is not necessary that it should be known to exist at time of abandonment, for that is impossible, but that it should actually exist -- a fact which admits of affirmative or negative proof at the trial of the cause. Upon the application of this principle to this case much diversity of opinion has prevailed. One judge is of opinion that the rule, having been laid down in a case of capture, is inapplicable to a loss sustained by a blockade. Two judges are of opinion that proof of the existence of the blockade having been made by the plaintiff, his case is complete, and that the proof that it was raised before the abandonment ought to come from the other side. A fourth judge is of opinion that connecting with the principle last mentioned the fact stated in the bill of exceptions that the abandonment was "in due and reasonable time," it must be taken to have been made during the existence of the technical loss. Four judges, therefore, concur in the opinion that the plaintiffs are entitled to recover, but as they form this opinion on different principles, nothing but the case itself is decided: that is that a vessel within a port
blockaded after the commencement of her voyage and prevented from proceeding on it sustains a loss by a peril within the policy, and if the vessel so prevented be a neutral, having on board a neutral cargo received before the institution of the blockade, the restraint is unlawful.