[Kohne v. The Insurance Company of North America.]

[Philadelphia, Saturday, January 8, 1814.]

KOHNE against The Insurance Company of North America.

Goods consisting of cocoa, indigo, tobacco, &c., were insured in October 1799, on board the ship Gadsden, from Newport, Rhode Island, to Passage in Spain. The goods were part of a cargo, which had been imported in the same ship from Laguira to Charleston, and there by permission of the custom house officers, suffered to remain on board, being entered for exportation and bonds given for the duties. Other goods were then put on board, with which she sailed for Passage; but being forced in consequence of an accident to put into Newport, the whole cargo was there taken out, and after some repairs was reshipped in the same vessel, which then sailed upon the voyage insured. The order of insurance only mentioned the kind of goods, but nothing was said of the importation from Laguira, nor of the circumstances attending the exportation from Charleston, although the British order of 25th January 1798, was then well known in the United States.

Held 1. That this was a material concealment which avoided the policy. 2. That the underwriters were not bound to inquire into the origin or history of the cargo, in consequence of knowing that the articles insured were such as the Spanish colonies produce; but it was the duty of the insured to inform them.

3. That by the true construction of the order of January 1798, the voyage from the colony to the mother country must be indirect, and not merely the course of the voyage: and

4. Whether the importation at Charleston was legal or not, it was at least so unusual and suspicious, that it was the duty of the insured to communicate it to the insurer.

This was as insurance on goods on board the_Gadsden, at and from Newport, Rhode Island, to Port Passage in *220] *Spain, warranted the property of the plaintiff a citizen of the United States, proof to be made in Philadelphia only. The policy was dated the 12th October 1799, and was for 15,400 dollars at 14 per cent. The order of insurance described the property as being cocoa, indigo, sugar, tobacco, &c., but gave no other particulars.

The cause was tried before the Chief Justice in November last, when contrary to his charge, the jury found a verdict for the plaintiff; and now upon a motion by the defendants for a new trial, his Honor reported the case to be as follows:

The ship Gadsden, laden with the goods insured, the property of the plaintiff, an American citizen, sailed from Newport for Passage on the 6th of September 1799, and on the 10th of the same month was captured by the British ship of war Pheasant, and carried to Halifax, where she was

[Kohne v. The Insurance Company of North America.] condemned with part of her cargo, including part of the goods insured. The defence relied upon was concealment, in reference to which the facts were these. In the beginning of the year 1799, the plaintiff carried in the same ship a cargo of linens, &c., from Charleston to Laguira, which he there sold to the agents of the Spanish government; and at Laguira and Porto Caballo, he received from them in return, and took in, a cargo of cocoa, tobacco, indigo, &c., which he carried to Charleston. Part of the cargo was there unladen; and part, being entered for exportation, and the duties bonded, was permitted by the custom house officers to be retained on board, as was frequently done there in similar cases. The ship was afterwards cleared out for Passage, and sailed with a cargo consisting in part of the cocoa, indigo, &c., brought from Spanish America, and which had not been taken out of the ship, and in part of other articles shipped at Charleston. In going out of the port of Charleston, the ship struck on the bar, and suffered considerable injury, in consequence of which she put into Newport. The cargo was there taken out, and the vessel being repaired, it was reshipped, and departed upon the voyage insured with the original Spanish papers, showing the origin of part of the cargo. None of these circumstances were made known to the defendants at the time of effecting the insurance; and it *was shown, that the defendants had asked such premiums as amounted to declining the risks, where [*221 there had been an importation without landing. The judge of Vice Admiralty at Halifax, by his decree, condemned the ship, and so much of the goods as had not been landed at Charleston, and restored the rest.

The Chief Justice submitted it to the jury, whether the defendants ought not to have been informed, that part of the cargo had been brought from Spanish America in the Gladsden, and not landed at Charleston, telling them at the same time, that in his opinion such information was necessary.

Hopkinson and Ingersoll for the defendants. In this case the jury disregarded the charge and the law; and if they have committed merely an error in fact, yet it being a plain one, the court will grant a new trial. In Hoyt v. Gilman, 8 Mass. Rep. 336, the court said, that if the jury found wrong with regard to a fraudulent concealment, they would order a new trial.

The concealment of facts relative to the importation of the cargo in the same ship, and its not being landed at Charleston was material, these circumstances having greatly

[Kohne v. The Insurance Company of North America.] increased the risk. On the 25th January 1798, the order in council was passed, which directed the British cruisers to seize and bring in for adjudication, all ships laden with the produce of French, Spanish, or Dutch colonies, and going directly from thence to any port in Europe, not English, nor the port of that country to which the ship belonged. This order in council was universally known; and if the facts brought this case within it, it was the duty of the assured to communicate them, whether that order or the decisions under it were or were not conformable to the law of nations. Sperry v. Delaware Ins. Co., 1 Condy's Mar. 473; Kohne v. Ins. Co. N. A., Ibid. The conformity of the order to national law, is of no importance between these parties. That the facts brought the case within the order is clear, because it was so held in this very case, and has been so held repeatedly since. The Immanuel, 2 Rob. 169. The William, 5 Rob. 349. It was justly so held. The voyage was a direct one from Spain to the mother country; not in course, *222] *but in plan. The documents proving the Spanish origin of the cargo were on board, to be used in Spain. There was no importation in the United States, no landing according to the case of the Polly, 2 Rob. 295, to break the continuity of the voyage, or to show a bona fide intention of terminating the voyage in the United States. The permission by the custom house officers to retain the cargo, was unwarranted by law; there can be no importation without landing; the officers cannot execute their duty without landing. I U. S. Laws 185, 193, 209, 211, 231, 233, 234. This which is called an importation, was therefore an illegal act, which neither our own nor foreign courts can respect. But if legal, it was at least novel. It was unknown in many parts of the United States. It was calculated to excite suspicion, and therefore to these defendants who knew nothing of the practice of Charleston, it ought to have been communicated. The assured cannot say that the underwriters were bound to inquire into this, or the history of the voyage. Not into this, because Charleston was not mentioned to them. Newport was the place of departure. Nor into the voyage, because, though the articles insured were mentioned, nothing was said of their origin, or of the ship in which they came. These were facts within the private knowledge of the assured, about which underwriters are not bound to inquire, Parkin v. Dick, Campb. 221, not public transactions, foreign laws, or the course of trade, which it is their duty to know. It is clear beyond doubt, that had the defendants known the facts that were withheld, they would have declined the risk, or asked a higher premium. In Lynch v. Dunford, 14 East

[Kohne v. The Insurance Company of North America.]

494, the policy was held void, because material intelligence respecting the risk was not communicated, although it turned out to be false.

Levy and Rawle for the plaintiff. It was left to the jury to decide, whether the facts not communicated, were material to the risk, and on this they have passed in our favor. They have also passed upon the question, whether there was not a sufficient disclosure to put the defendants upon inquiry. Their verdict ought not to be disturbed. In Williams v. Delafield, 2 Caines 329, the judge was of opinion that there was a *material concealment, but the jury found the [*223 contrary, and a new trial was refused. In Long v. Duff, 2 Bos. & Pul. 209, it was left to the jury to decide, whether according to usage, it was the duty of the insurer to inquire into certain facts, and a new trial was refused.

The facts if concealed were not material, because they did not bring the case within the true construction of the order of January 1798. What the subsequent decisions of the English admiralty have been, is of no importance; they had not occurred prior to this insurance. The only point is what will this Court say the construction is; or in other words, what is in truth and fair reasoning a direct voyage from the colony to the mother country. Every voyage is direct in which there is no intermediate port between the termini; a voyage is indirect in which there is such an intermediate. port. Here was the intermediate port of Charleston, where there was an importation to satisfy our own law, and also the British decisions. Our own law, because there is no legal necessity for landing a cargo, that has been entered for exportation; nor is it practised except to test the weights in case of suspicion. 1 Laws U. S. 188, secs. 9, 10, 16, 26, 29, 30. The British decisions, because by them the spirit of the order is to encumber the goods with the burden of duties and additional freight, and the inconvenience of greater delay. The Immanuel, 2 Rob. 169; The Polly, 2 Rob. 301. Goods may be imported in the legal sense, though not landed. Leiper v. Smith, Bunb. 79. Discharging from one ship into another in corpore comitatus, is an importation. 12 Co. 18. Freight, duties, delay, all attended this case as much as an actual landing. The admiralty of England is not satisfied with landing. The William, 5 Rob. 349. Every thing is in that court but mere evidence of intention; and in our case the intention bona fide to import, is inferrible from landing part of the cargo, and afterwards adopting the voyage in question. On this the jury have also passed. The Spanish VOL. VI.-14

209

[Kohne v. The Insurance Company of North America.] papers on board, served as certificates of origin to prevent captures by the French.

But the facts were not concealed, because it was the duty of the underwriters to take notice of them, or to make *224] *inquiry. As to the mode of importing at Charleston, they were bound to know the custom of that place; and as to the origin and history of the cargo, they must have known that it came from a Spanish colony, and was going to Spain.

If it concerned them to know in what vessel imported, and whether landed or not, there was sufficient told them, to lead to inquiry.

TILGHMAN C. J. after stating the facts, and the manner in which he left the cause to the jury, delivered his opinion.

The plaintiff's counsel contend, that the cause having been submitted to the jury on a point of fact, their verdict ought not to be set aside. If it had been submitted on a matter of pure fact, yet if it clearly appeared to the court that the jury were mistaken, it would be their duty to grant a new trial. But although in compliance with the usual practice, I left it to the jury to decide, whether circumstances material to the risk, had been concealed by the plaintiff, yet in truth in this decision were involved both law and fact. Whether the circumstances were or were not communicated was matter of fact, but the materiality of the circumstances depended in part on considerations of law. As there was no evidence that the circumstances alluded to had been communicated, there could be no reasonable doubt on that head. But it has been said, that it was the business of the defendant to make inquiry, because being told that the cargo consisted of articles the growth of Spanish America, he was put on his guard, and ought to have inquired how they came to Newport. Whether this inquiry ought to have been made by the defendants, appears to be rather matter of law, and I think they were not bound to make it. They had a right to presume, unless informed to the contrary, that the cargo was of such a nature as might be carried from Newport to Port Passage, without being subject to capture, in consequence of facts, resting in the private knowledge of the plaintiff. Of the British orders in council of the 25th of January 1798, under which the condemnation took place, it may be fairly presumed that both parties had notice, because both were too much conversant in business leading to that kind of knowledge, to be supposed to remain in ignorance of such an important state paper, which had been so