Smith v. Delaware Insurance

Tilghman C. J.

(After stating the case.) I have made inquiry, at what time this-clause of warranty was introduced into our policies of insurance, and it appears, that it was not inserted before the year 1788. It was probably adopted about the middle of that year. Disputes had arisen between, the underwriters and assured, concerning losses by seizure, for breach of the revenue laws of foreign countries. The assured contended, that unless those laws were known to them, the underwriters were liable. To prevent these disputes, the clause in question was introduced. To bring a case within the warranty, there must be both a seizure and an illicit or prohibited trade. It is not enough that a seizure is made, on an allegation of prohibited trade. It must be proved, that there was a prohibition, and that the case is within it. And it must be a legal prohibition, such as the prohibiting power had a right to make. There was a time when all. foreign commerce was prohibited to the United States. England prohibited all trade to the ports of France or her allies ; and France prohibited all trade to England or her colonies. They divided the world between them. But it was never supposed, that these prohibitions discharged the underwriters from loss by capture at sea, for breach of them. That has been given up by the counsel for the defendant. They confess, that such decrees are void, so far as they operate on the ocean. But they contend that every sovereign, may lawfully make any decree, to take effect within his territory. To give force then, to the decree of the 6th August, 1807, it must be shewn, that Hamburg was, at the time of making it, within the territory of the Emperor Napoleon; and, moreover, to bring this case within the plaintiff’s warranty, it must be shewn that the seizure was made, in consequence of a breach of that decree. The Julius Henry sailed from Baltimore the 22d August, but 16 days after the date of the decree, to say nothing of the time of its publication, an essential circumstance, concerning which the evidence is very imperfect. Now, can a case of this kind, upon any principle of fair construction, be brought within the penalty of the law ? a case, in which a neutral is called upon, to do things which are impossible. In the first place, it was impossible that the decree should have been known at Baltimore, when the ship sailed; and in the next place, if it had been known, it could not have been complied with, because the French consul had no authority to grant certificates of origin ■in such case. It is very true, the 4th article expresses, that ■there shall be a confiscation, for want of the certificate of ■origin, although the ship came from a port in which no commissary of the emperor resided. But it cannot be inferred from this, that the decree was intended to operate before there was a possibility of knowing it. There being no consul at the port, might be a hardship, but no insuperable difficulty would occur in .the United States, provided the decree was known; for then, the merchants might take care to make no shipment, but from a port where a consul resided. From the nature of the decree, it must be supposed, that the French consuls would be ordered to grant certificates of origin in all neutral countries, and, therefore, the penalty ought not to be applied to cases, where ships sailed, before the consuls had received instructions to grant the certificates. But it is said, that the courts of every country, best know the meaning of their own laws. I grant it, and had this cargo been condemned by the tribunal of prizes, however severe the construction they put upon this law, it would have been difficult to gainsay it. But it was not so. The emperor would not suffer his tribunals to take cognisance of the case. What order he made, we have heard,, but have not seen; for no copy of his decree has been produced; but the evidence is, that by one sweeping denunciation, he confiscated all the American property which had been seized by his officers within the Hanseatic waters. Nothing could fee more iniquitous than this whole proceeding; it was a mockery of justice, disguised under the garb of law. Considering all the circumstances, I was of opinion at the trial, and still strongly incline to the same opinion, that this seizure and condemnation, stript of all false pretences, and re4uced to the naked truth, was an act of violence, not falling-within the true intent of the warranty. In the Antwerp cases, (jecj(jecj jn Court, the pretence was, that the seizure and confiscation were made under decrees of the emperor; and there was the same warranty as in this case. Yet the assured recovered. There, too, the emperor, in person, ordered the property to be sold, without any condemnation by the usual tribunals. No point was brought forward on the warranty; I presume, because it was not thought tenable.

Hitherto, I have considered the case, as if Hamburg was within the territory of the emperor Napoleon. If it was not, upon the defendants’ own argument, the decree would have no validity. It is certain, that Hamburg was under the controul of the French arms. The emperor was in a condition to give the law. But, upon reflection, I am inclined to think, that when the cause was tried, I gave more weight to this circumstance than it merited. For, although the emperor had force sufficient to make a conquest, yet it does not appear, that he occupied Hamburg as an enemy, or dissolved the government; on the contrary, the senate were permitted to exercise their functions, and the American consul was actually residing there. In this situation, when the citizens of the United States were trading to Hamburg, they had a right to look to the municipal laws of Hamburg. A belligerent, who has temporary occupation of a neutral country, but does not take the government into his own hands, is not in a condition to make such ordinances respecting commerce, as are contemplated by the plaintiff’s warranty. In the case of Church v. Hubbard, 2 Cranch, 187. the seizure was, for breach of an ancient law of the Portuguese government; and in Faudel v. The Phoenix Insurance Company, (decided in this Court, at March Term, 1815,) there was an ordinance of the established Spanish government. But there is a case, much like the present, and full as strong, in which it was decided by the Court of King’s Bench, in England, that the temporary occupation of a neutral country, without dissolving the government, does not give the occupant a right to make municipal regulations, of which other nations are bound to take notice. I allude to the case of Donaldson v. Thompson, 1 Camp-hell, 429. The question was, whether a decree of a Court of admiralty, established by the emperor of Russia, in 1807, in the island of Corfu, (one of the islands of the Ionian republic) was of any validity. It was in evidence, that the Russians had, at that time, a garrison in Corfu, and 6000 men in the different islands of the republic ; that they had made Corfu a military station for four or five years, and continued in. possession of it, till the peace of Tilsit, when they delivered it up to the French; but that previously to that event, the flag of the Ionian republic was hoisted in the forts in the island; there was a port admiral appointed by the republic, and consuls from the Sublime Porte and the king of Great Britain, were recognised by the prince and senate of the republic, who continued in their functions, till the government was dissolved by the French. On these facts it was decided, that the Russians were to be considered as visitors in Corfu, and not sovereigns ; that they had no right to establish a court of admiralty in a neutral territory, and consequently the decree was void. So far as regards force, the Russians were, at Corfu, what Napoleon was at Hamburg; both had power to dissolve the government of the country, and both, from political motives, declined it. Considering the present case, then, under all its circumstances, I do not perceive that either law or justice require a new trial.

Gibson J.

If the territory, within which the seizure was made, had been actually subject, whether legitimately or not, to the legislative controul of the French emperor, I would, notwithstanding the extreme injustice of the decree as applied to the cargo of this vessel, hold the trade illicit and prohibited, within the true meaning of the warranty. The broad line of distinction lies between intra-territorial and extra-territorial laws. The first, no matter what the motive may be, arise from an exercise of power, at least. lawful; and, within the actual limits of the state, bind every person to obedience, whether subject or foreigner; the second, except insomuch as they are intended to controul, on the high seas, the subjects of the sovereign enacting them, arise from attempts at usurpation; and are, therefore, as against all others than such subjects, of no force whatever. In other words, every sovereign may, within his own territory, bind every one by his laws, whether citizen or stranger; but beyond its limits, he can bind none but his own subjects, and even those, only on the ocean, which for that P*lrPose» "ls considered as a part of his territory. An intraterritorial, or, as it may be more aptly called, a municipal jaw^ whether its object be domestic or belligerent, and whatever be the injustice of its operation on persons, as in this case, ignorant of its existence, and therefore without the means of avoiding its infraction, is nevertheless obligatory on all. Without doubt ignorance may with propriety be urged to the local authorities as an equitable consideration for remitting the penalty where a discretionary power exists ; but it cannot be insisted on as giving a right to a dispensation ; much less can it authorise a foreign jurisdiction to question the validity of the law. A municipal law must doubtless be promulgated; but it is not necessary that it be so at any definite period before it goes into operation ; it is sufficient to bind foreigners, that the promulgation is good as to citizens. It is therefore unimportant, that, in this case, the law went into operation before the plaintiffs, residing here, could be informed of its existence. Such a law operates only on those •within the territory of the sovereign declaring it, and does not, like a proclamation of blockade, affect those without. A foreigner must, therefore, be content to take the laws of every country he visits, as he finds them, without scrutinising their justice or policy; nor does it lie in his mouth to say they were enacted for a cover or to entrap; his business is to obey. He is an unbidden guest, and must take such entertainment as chance may afford. The justice of a law, therefore, has no relation to its obligatory force. These principles are, I apprehend, incontrovertible. Then what is the character of so much of the decree as is applicable to the question ? It is, I think, beyond doubt, exclusively municipal. There is no assumption of authority, to seize on the ocean; at least, no such authority is asserted in the decree itself; unless it be that implied authority which every sovereign rightfully has tó arrest, even beyond his own limits, a vessel on her way to violate his domestic regulations; and which, by the bye, would, if the prohibited goods had, in this case, been ultimately destined for any place in the French territory, have superseded the necessity of proof of actual trading, or even an intention to trade, at the place of seizure. The presumption, therefore, is, that Napoleon, notwithstanding the obliquity of his general course'in respect to commerce,originally intended to execute this decree within his own territory, rather than that he intended from the first to violate every j thing like international law. It will be found, that when he meant to break through all restraint, he was usually pretty explicit, at least in the language of his decrees. But, be that as it may, we must look at the decree itself for its character ; for no subsequent abuse of it can change its original nature, and therefore it will be deemed unexceptionable if it bear nothing offensive on its face. In the case of The Aeteon, 1 Edward’s Adm. Rép. 255, Sir William Scott, speaking of this same decree, admits, that looking to its terms it would seem to be confined to ships navigating only to the ports of France, and although he there decreed salvage to the re-captors, it was not because the vessel would have been in danger of condemnation from a fair application of the decree, but because the capricious practice of the French prize courts would, though the vessel was not bound to a French port, have perverted it into a colourable pretext for condemnation ; and that, therefore, there was, by the original capture, a violent probability of eventual loss to the American owner; which was all that was necessary to be made out by the re-captors ; for it is not the justice of the condemnation, but the degree of probability, that it would have occurred, which determines the propriety of salvage. This decision admits all that I ask. The decree purports to be confined to property either actually in France or going to a French port; and if so, the practice of the French prize courts cannot determine its character to be extra-territorial; for it is no objection to the validity of a law when applied to an object fairly within its operation, that the same law has also been applied to another object not within its operation. Within the French territory, therefore, commerce in colonial produce, unaccompanied by a certificate of origin, was lawfully prohibited; and I take the prohibition contemplated by the warranty to be, that which arises from a law exclusively and indisputably municipal, as this was, without regard to whether the motive for its enactment were domestic or belligerent. Nor do I allow more weight to the objection urged against the mariner in which the decree was in this instance executed. Every state may execute its own laws in its own way. The executive and judicial departments of government may be united, or kept separate, at the pleasure of the nation; and when the latter is the case, being £or tjje protection of the subject, the sovereign may, nevertheless, without being answerable to any but the nation, execute the laws in person, or by other instruments than the ordinary courts of the country: it is a matter with which third persons have nothing to do. I speak with reference to municipal laws ; for the law of nations not being subject to the will of any individual state, must be executed in the way that law itself requires. Then the condemnation having been by the emperor in person, was at most an irregularity in the procedure, of which, like an error in process, a neutral can take no advantage. It is sufficient that the property was in fact obnoxious to the penalty, and that the rule was avowedly applied to it under the authority of the nation; but whether by the sovereign himself, or by the regularly constituted tribunals of the nation, is only for the nation itself to enquire. The latter, by acquiescing, makes the sovereign the proper organ, if he were not so before. In truth, the act of the sovereign is in all cases the act of the nation, and must be so considered by every foreign jurisdiction.

But the circumstance most important to the plaintiff’s case, is, that the place where the seizure took place was no part of the French territory. For take it that Cuxhaven was an appendage to Hamburg, yet Hamburg itself was not, as regards neutrals, subject to the French laws. To give validity to this decree as a municipal law of the place of seizure, it is requisite that such place be part of the French territory. Now there is no doubt but the country was overawed, and treated, really though not ostensibly, as if it had been conquered. But although conquest be a legitimate means of acquiring the sovereignty of a country, whether the war be just or unjust (for that is for the exclusive consideration of those that are parties to it) still it is necessary, on taking possession, to abolish the ancient authorities, or at least supersede those who are found in the exercise of the governmental functions; for while they are suffered to continue, they constitute the actual government to which, only, neutrals can look. Before the conqueror is recognised as the owner of the sovereignty, he must take exclusive- possession of it,' and become the ostensible as well as real administrator of the government. The change should be a matter of notoriety to the surrounding states. In the case of the Bolletia, 1 Edward’s Adm. Rep. 178. Sir William Scott inclined to think that a territory obtained by force does not change its national character, until the acquisition is confirmed by cession or a long lapse of time. But perhaps it may be admitted, that where the occupancy is not for a temporary purpose, and the government organised by the conqueror is not provisional, but such as indicates a permanent annexation, neither cession nor lapse of time, as to neutrals, is necessary. Strangers are bound, without scrutinising the title, to submit to whatever government they find established: the appearance of a settled state of things is all they ought to require. On this principle the American government has always acted in its diplomatic intercourse, and, I believe, with the approbation of the world; But, on the other hand, it is fully proved by the case of Donaldson v. Thompson, 1 Camb. 429. that the French had not such possession of the country as entitled them to legislate for it. The Russians had more ample possession of Corfu, for they occupied it as a military station ; but because the Ionian republic continued to entertain foreign consuls while its flag still flew, and its port admiral performed his usual functions, the Russians were looked on as visitors, not sovereigns; and Lord Ellenborough took the precise ground that while a government subsists, a court cannot look to the degree in which it may be overawed by a foreign force. In Levi v. Alinutt, 15 East, 267, the same principle, under circumstances very much like the present, was directly recognised. That was an action on a policy on goods from London to any place in the Baltic, “ warranted free from confiscation “ by the government, in the ship’s port or ports of discharge.” The ship and oargo on arriving at Pillan, in the Prussian dominions, was at the same instant seized by a party of Prussian soldiers, and by the crew of a French privateer, who disputed the possession of her ; on which the Prussian government referred the matter to the French government at Paris, where the ship was condemned as prize to the French captors. Lord Ellenborough, with,the concurrence of the other judges, said that the conduct of Prussia evinced her vassalage to France, but could not be deemed an act of confiscation by her; for though it shewed a permission for prance t0 ¿0 as she pleased in the Prussian ports, yet to hold that to be a Prussian confiscation, would be saying that every country, too weak to protect its independence', confiscated all the property which the French chose to take within its territories. The confiscation being therefore considered not to be the act of the government of, the country, was held to be no breach of the warranty. There is no doubt the senators of Hamburg, like the government of Prussia, in the case just cited, were the creatures of Napoleon; but although the government was at his feet, it was suffered to exist. The counsel say, he might have introduced his grenadiers into the senate house, and procured from them, in the garb of legislators, a recognition of the decree; and ask if its extension, thus procured, would have given it more validity than it already had ? That is an extreme case; but I answer, it, perhaps, might; being considered either as an abolition of the old government, or a personal superseding of the former senators, if the ancient form were still supposed to subsist. It might be sufficient for neutrals, if the law were declared by any persons occupying the places of the former administrators of the government: at all events, they would know what they had to trust to if they entered the country. But so far was the old government from being superseded, that the French had not even military possession. A corps of douaniers had made a lodgment in the country, and established a line of custom-houses along the Elbe; but in every thing else there was no visible change. The senate and burgomasters maintained, apparently at least, the' usual commercial relations by accrediting foreign consuls ; and in no matter of police did these custom-house officers, who, in truth, were only visitors, interfere. The country was afterwards formally incorporated with France, as an integral part of the empire ; but that shews it was‘not so before. Then, as neutrals can receive the law only from such government as may be found in the actual exercise of its functions, whether it exists by force, by fraud, or at sufferance, it follows, the seizure was a wrongful application of the decree to territory not subject to the French government, and therefore an act of lawless violence. On this last ground, I am against a new trial.

Duncan J. gave no opinion, not having heard the argument.

New trial refused.