The Chancellor.
1. Did De Wolf withhold from the insurers any fact increasing the risk insured 1 The case does not show, otherwise than from the policy, what representation of facts was made by De Wolf to the insurers; nor is it stated that he communicated, or that he withheld, any particulai fact. But it has been assumed, that the con[105] tract between De Wolf and Levy, was not disclosed; and it is urged, that this contract should have been made known to the insurers. I do not perceive that this contract enhan- . ced the risk. This contract does not show, that the government of Spain, had any concern in the transaction. De Wolf was ignorant, that the cargo -was destined for the use of that government; and Levy was a Danish merchant. Had this contract been exhibited to the insurers, they would have learned from it, the rights of Levy and De Wolf against each other, and that Levy, a neutral was to become the proprietor of the cargo, at the port of delivery, after the insurance would cease. These circumstances, did not expose the cargo to any peril, which can be perceived, as an obvious, or ordinary result from such facts ; and the contract, therefore, seems not to have varied the risk, in question. It is not found, as a fact, that the risk was increased, by this contract. This question, so far as it is one of fact, was open to proof; and so far as it is a question of law, we are not at liberty to say, that a contract valid by our law and the law of nations, enhanced the risk insured.
[104] No fact enwMihefd. nsk
[105]*1052. Was the cargo American property, according to the stipulation of the policy ?
. Cargo waa perty.
Payment for this cargo was to be made by Levy to De Wolf, on its delivery, at Havana, Laguira, or Porto Cavello. This appears distinctly, from the negotiation Whióh preceded the written contract between the parties. The letters forming the written contract, are silent in respect to the time or place of payment; and this omission of a matter so import- . ant, is somewhat mysterious. As the case stands, we must either take the verbal agreement upon this point, or proceeding upon the written contract, we must supply its silence by the general conclusion, that where no time of payment is stipulated, the price of the thing sold, is to be paid, on its delivery to the purchaser. It must, accordingly, be taken as a part of this case, that payment was to be made by Levy to De Wolf, when the cargo should he delivered at one of the three ports. This being so, the case before us, is the ordinary contract, by which the vendor, engages to deliver the thing agreed to be sold, at a future time, and the purchaser [106] engages to pay the price, when he shall receive the thing purchased, jn such a case, the property in the thing, which is the subject of the contract, remains in the vendor, until the delivery. The present case is, in this respect, exactly tik® that of Ludlow v. Bowne & Eddy, 1 John. 1. In that case, the Supreme Court held, that goods shipped in circumstances like these, remained the property oí the consignor until their delivery; and I entirely approve that decision. The reasons of the Supreme Court, in support of its decision, in that case, are a sound and just exposition of our own law, and the law of nations.
The transactions concerning this cargo, at Havana, did not change the property. It is not stated that Hernandez & Chavitau were subjects of Spain ; but such they probably were; and I assume the fact, as it has been assumed in the argument. Hernandez & Chavitau were mere agents. They were the agents of Levy, to accept for him, the cargo at Havana, or to decide for him, as he had a right to decide, that the cargo should proceed to one of the other ports ; and they were the agents of De Wolf, to direct the master of the vessel, to proceed. They decided for Levy not to receive the cargo, at Havana. They directed for De Wolf, that it should proceed. ' They did nothing beyond the scope of their powers; and De Wolf continued the owner of the cargo. The result is, that the cargo was the property of De Wolf at the time of its insurance, during the voyage, and at the time of its loss ; and consequently, the warranty of American property, was fulfilled.
No fraud subjeetmg cargo tion.
3. Was there any fraud justly subjecting this cargo to con¿emnation 1 This inquiry, and the last, concerning the due performance of the warranty, are in effect, nearly the same ; ” but for the sake of distinctness, they are thus stated. Considering the cargo as belonging to De Wolf, it was the property of a neutral, in the war then existing between Spain and Venezuela. But this cargo, though thus neutral, was destined for ports in the possession of Spain, and for the use of its government. These facts did not subject the cargo to condemnation, by the law of nations. The articles composing the cargo, were not contraband of war; and here was
[107] no blockade. The destination to a belligerent country, was perfectly lawful. To say that it was not so, would be to say, that a neutral cannot hold commerce with a country at war. The right of neutral and peaceful states, to carry on commerce with countries at war, excepting in contraband , ' articles, and excepting with places in a state of blockade, is perfect and unquestionable. If monarehs have sometimes decreed, and if Judges of prize Courts have sometimes declared, that the mere destination of neutral property to the country of their enemy, shall subject it to condemnation, they have abused their power, and have violated a fundamental principle of the law of nations. It is the duty of all courts of justice, and of all nations, to resist an encroachment so unjust, so subversive of the rights of peace, and so unnecessary to the rights of war. The cargo in this case, was to be delivered to Levy, at one of the three ports, and was to be by him delivered to the Spanish government. In this, I perceive nothing forbidden by the law of nations— nothing which deprived the cargo of its neutral character, during the voyage—.and nothing of fraud. A government at war. may, like any of its subjects, contract to purchase the property of neutrals, when the articles shall be brought into its own dominions; and a neutral may contract to deliver his own goods in a belligerent country. The question which may always arise in such cases, as it arises here, is, whether the contract is a fraudulent disguise, to give to the property the character of neutrality, during its transit, or not—whether the property, in truth, belongs to the neutral or to the enemy. The principle of the law of nations, laying out of view the case of contraband articles, and the case of places actually invested, is, that the property of a neutral in its passage to a country at war, is free, and that the property of the adverse belligerent, is subject to capture and forfeiture. There are, in general, strong motives to place all property destined to a country at war, under the guise of neutrality ; and these motives are powerful, in proportion to the prospect of gain and the danger of loss. Hence contracts, documents, and formal transactions bearing the util ost appearance of verity, arel often contrived, to conceal [108] the froperty of an enemy, under the mantle of a friend. If belligerents commit violence, neutrals commit frauds ; and the rights of war, as well as the rights of peace, must be maintained. Courts before which these questions occur, therefore, have and must have, power to penetrate the secret truth of the question, whether the property is, in good faith,. neutral or not: and it must always be a question, in each particular case, whether the garb of neutrality, is genuine or fictitious, real or collusive,
[107] Rights of neuCommerce considered,
[108] Agreement shall remain in neutral till delivery, lawful.
In this case, the cargo was certainly neutral, when De Wolf and Levy were about to make their contract; and it probably, comported with all their views, that it should re- . . ........ ' , mam neutral, until its delivery at one of the three ports. There seems to have been no sufficient motive on the part of either of them, for any disguise of the real ownership. They were at liberty, to agree, that the cargo should remain the property .of De Wolf, until its delivery at Havana, Lar güira or Porto Cavello ; and they did so agree.
The real facts are certainly, in some degree, disguised by the bill of lading, the letter of instructions from De Wolf to the master, and the letter from De Wolf to Hernandez & Chavitau. These documents were prepared, several days after the insurance; and the bill of lading, at least, went in the vessel. The bill of lading, stated no destination beyond Havana: the letters áre silent respecting any delivery at Laguira or Porto Cavello ; and they indicate, that the disposition of the cargo at Havana, either by receiving it there, or by sending it to another port, was to be on account of De Wolf. So far as these documents are silent, in respect to any matter which the parties were at liberty, to insert in them or not, the omission is neither extraordinary nor cul pable; but so far as they represent that the cargo was to be disposed of, on account of De Wolf, and for his best advantage, they are untrue, according to all the other facts in the case. This representation exposes the case to some suspicion ; but it cannot outweigh the force of all the other undisputed facts.
Not a dis-g™e r°r JPa"
Upon all the facts before us, this was not a fraudulent disguise of Spanish property, under the name of De Wolf [109] It may be a case of some suspicion; but no fraud is proved; and no satisfactory conclusion of fraud can be derived from the facts. To adjudge this transaction^ fraudulent, would be, to substitute suspicion and presumption for proof, in a case where no adequate "motive‘for fraud appears, and where no fraud Has been found' by a jury.
My opinion is, that"this cause has been rightly determined by the Supreme Court.
Bronson, Senator. This was an action brought by De Wolf, in the Court below, to recover 20,000 dollars, insured by the defendants below, The New York Firemeti Insurance Company," on the cargo of the brig .George Washington laden at New York, with liberty to discharge at Havana, Lagüira or Porto Cavello, the premium being regulated' according to the length of the voyage, and the litimber of ports visited.
Case stated.
This cargo was purchased and shipped under a contract with Moses B. Levy, of St. Thomas, deliverable at either of the above ports, as "he might elect; and the price of freight regulated according to distance. It was captured between Havana and Lagüira, and condemned as Spanish property, This Levy turned out to be an army contractor, and intended the cargo for the Spanish troops.
The important question" is, whether this was American ■ property; it being warranted such, by the assured: and here it may not be improper to remark, that, as warranties form an important part of these contracts of insurance; and, from their nature, the assured only can know the truth or falsity of them, the interests of commerce,' as well as public justice, require that they should be strictly performed.
The question
Insurance warranties pe^° formed,
In the present case, if the cargo belonged to any one other thah an American, it constituted a good defence to the act} , v tidn. It is of no importance, therefore, whether it should prove to be "the property of Levy, the Dane, or of the Spam ish'government; for, 'although in the first case (it being still neutral) the risk" would" not be increased, yet the underwriters would, in either" event be discharged. The contract would be void ab initio. De Wolf having, in the out-set, [110] violated the contract on his part, no risk was ever under-" tajcen py the insurers. But a careful examination of all the facts and circumstances, attending this case, has brought me to the conclusion, that the cargo, when captured, was American, according to the terms of the warranty; and for the reasons assigned at length by the Court below:
[109] If oargo not American, pohey void.
[110] American.was And why.
That the title had not vested in Levy, at Havana, he having refused by his agent, to receive the cargo at that port.
2. It does not appear that He Wolf knew, that it was ultimately destined for the Spanish troops.
3. His warranty superseded the necessity of disclosing to the underwriters, any circumstances in relation to the national character of the property, or the transactions of the voyage.
It remains to reconcile some of the circumstances attending this transaction, which have been urged by counsel against the American character of the property, with the above result. I shall do this, without inquiring whether these are matters which should have been referred to the Court and jury below, as contended upon the argument.
Objections.
The circumstances urged with the most plausibility and effect are,
1. That no payment was to be made, on the delivery óf the cargo in the West Indies; and hence the inference, that it was paid for in New York, and became the property of Levy at that place :
2. That Levy exercised acts of ownership, in controlling the property at Havana by his agents ;
3. The false and deceptive instructions relative to the disposition of the cargo given by De Wolf to Hernandez & Chavitau; and by them again to their agents at Laguira and Porto Cavello.
Obviated.
Unimportwhere pay-made™3810 b°
It does not appear to me important, when, how, or where tjje payment was made. The parties might arrange that to suit their interest or convenience, without anecting the character of this property. Levy would have been legally bound to pay for the cargo, freight and insurance, whenever proof should have been furnished of the safe delivery ac- [111] ' cording to contract; and if, in the meantime, he should have advanced for a part, or the whole amount of the cargo, he would be entitled to recover back the advance, on the failure of De Wolf to fulfil on his part. Beside, from the nature and terms of the contract, De Wolf would not be likely to have received payment in the West Indies, unless it were in bills of exchange ; for it seems his first wish was to procure a freight for his brig; and he did not expect, therefore, to require his own funds to load her; and the insurance of his money home, would probably have cost nearly as much as that on the cargo out, which was 7 per cent. It will be recollected, that he was to receive but 5 per cent, for his profit on the whole transaction.
It was proper, and, indeed, necessary to alter the bill of lading at Havana, when the destination of the brig was altered. The underwriters must have contemplated such an alteration ; and this too by Spanish agents. To have made a new bill of lading at this port, would have exposed the cargo to still stronger suspicions and greater risk; and this could not have been done without manifest absurdity and falsehood on the face of it; the cargo not having been shipped at that place.
Bill of lading properly altered.
As to the deception practiced by De Wolf and the agents, in ordering a disposition of the property, its existence is to be regretted. It is desirable that the utmost fairness and consistency should be stamped on these transactions throughout. But I cannot perceive that the underwriters have any cause to complain. It must be conceded, that if this cargo had been consigned directly to Levy himself, or even to the Spanish Intendant, it would not have invalidated the policy. Although the cargo was ordered to be sold, when it appears no such thing was intended, yet it was placing it under the ordinary circumstances of American cargoes, bound to these markets for sale. It was a deception calculated to lessen the risk, and benefit the underwriters ; as it served to impress more strongly on the property its real and American character, than would have been done by a naked consignment.
Deception not in a material point.
[112] WiiE elEri; Senator: This case would seem to depend on-one of the following questions-: 1. Was the delivery of the cargo to Levy, either in fact dr construction of law, made in New York1? 2. Of, if not’made- there, was it itiade to Hernándéz <&" Chav'itau, as the consignees of Levy, oil the arrival of thébrig at Havana?'
If the delivery was made to Levy, either' in' factj or in construction of law, at'any time previous to the capture or' condemnation, of■ the' cárgo, no question is'made, but that the warranty df American' prbperty was violated, tie being; at the time-df-'the delivery, a'resident offSt. Thomas.
The case stated, and the evidence considered.
It is in proof that Levy, a resident merchant of the neutal or Danish Island of St. Thofnas, entered' into a negotiation in the city tif’New York,-with Dé Wolf, an American citizen, and a nlerctiánt' of that place, for the purchasé of. a' quantity of provisions.' This negotiation terminated in an agreement between the parties, the- terms and condition's of which are contained in their respective léttérs, hearing date the 2ist July, 1818. All'the evidence throwing light ori this transaction,"is’contained' in- the letters"of contfact; in the letters of instruction'to Capt! Pratt, the master of' the George Washington; in a letter from De Wolf to' Hernández & Chdvitau, of' Havana ; ih the letters of advice from the latter td their'c’ofi'es'ponderits at Porto Cávello and'Laguira, and ih the sentence* of condemnation by the Ticé Admiralty Court' of the Republic of Venezuela. It is principally from1 the above correspondence, that the facts'ih ibis' cásé ai'e- to be deduced: and,1 prima facie, there is' ndthing updii the papers, when viewed separately, to: falsify the stipulation that" the cargo' was American property. But . when w'e connect'thése' p’apérs,’ and examine them as originating in',’ and growing out of one entire' adtenture, the' evidence which'they affoid'is by no means'obscure.
Negotiation .■tween Levy id De Wolf.
The negotiation, between Levy & Dé Wolf, was'settled by their agréemetit on the 21st of Jtily. On the face of that agreement, De Wolf contracted ’ to purchase and to ship on board, the Warrior and' the George Washington, at the port of New York, a certain quantity of provisions' ; ’ and to' deliv [113] er the same, at a .stipulated .price, for .the .freight, either in Havana, Laguira, or Porto Cavello.
Was the purchase originally made,on the.account .and at -the risk of Levy? or was it a contingent.agreement, resting upon a precedent condition? Levy says, in ,his letter to De Wolf, (and, with the exception of this letter, it will be perceived that his n,ame was cautiously concealed as a party to the voyage,) “I am desirous of purchasing of .ypu, deliverable at the Hayana, Laguira, .or Porto Cavello, a certain quantity of beef, pork, &c.,” and he closes.by agreeing to pay freight, at a certaino.r .-fixed rate per barrel.
Whether sain .was contingent.
Levy’s letter
If this letter and ;De Wolf’s answer wpre the .only evidence in the case, then the delivery wpuld appear .to rest on a precedent condition; and Levy .would not .have been bound to make payment for the cargo, including .insurance, .commission and freight, before .'the .delivery; but they are followed by. the letter of De Wolf to Hernandez & Chavitau, and stand connected with their acts in relation, fo the George Washington and her cargo, , after her arrival at the port of Havana. This correspondence, and these acts go far to elucidate the real character of the voyage.
" And Wolf’s swer. r an
Levy was a resident merchant of .St. Thomas, a Danish and a neutral island; but he stood compromitted with the Spanish government, .as a contractor or purveyor of .navy or army supplies ; and there is nothing in.the proof to lessen, the presumption, that he was, in reality, ,a native subject of Spain, anda mere.denizen merchant .at, St. Thomas.
National character of Levy
In the letter of De Wolf to Hernandez & Chavitau, enclosing the invoice of the cargo, he requests them to.receive and dispose of the same to the “ best advantage on .his account and he is .utterly silent, as it respects the contract of delivery, at a price pertain to Levy. Here, then, was evident design, in case the vessel should he boarded by an enemy of Spam, to conceal the true character of the property; or why not direct Hernandez & Chavitau.tp.deliver the cargo to Levy, on his complying with .the conditions of the agreement of the 21st July. The agreement was to deliver to Levy, at a.price certain: the .letter of advice directs the cargo to be “ sold to the best advantage on De Wolf’s .account.”
Letter to Hernandez & Chavitau
[114] Evidence of payment in New York
This letter, also, authorizes Hernandez & Chavitau to draw on De Wolf for all disbursements; and they authorize their correspondent at Porto Caveilo, to draw on him in New York, in the event of purchasing a return cargo, for 10,000 hard dollars. Here, then, is a presumption, strong, if not conclusive, that the shipment was paid for by Levy in New York, before the sailing of the ship; or why draw on De Wolf, for the purchase of a return cargo, if the proceeds of the outward cargo were to be paid for by Levy, on delivery in a Spanish port? or if the cargo was to be sold to the best advantage on De Wolf’s account ? for, in either event, De Wolf must have had available funds at the port where the cargo should be delivered. Then why draw on him for 10,000 hard, or silver dollars, payable in New York.
De Wolf farther instructs Hernandez & Chavitau,i: If you think it best for my interest, to send the vessel to any other market, say to windward, you may do itbut, in that case, he adds to the cost of the flour, as he expresses it, $1 50 per barrel, this being the precise sum which Levy contracted to pay, in case he directed the cargo to be delivered, either at Porto Caveilo or Laguira.
Levy cautiously concealed.
Here, then, again, on the face of these papers, De Wolf authorized the vessel to be sent to any other market, “ say to windward,” and Levy is cautiously concealed, as a party in interest, although the contract with him, on the faith of. which the shipment was expressly made, places the designation of the port of delivery under his absolute direction and control. It stands proved in the case that Hernandez & Chavitau were the persons selected by Levy to be the consignees of the cargo at Havana ; and further, that they had his instructions as to its future disposition. Then why this ambiguous letter of De Wolf, if it was not to conceal the true character of the property ?
Bill of lading altered, &c.
On the arrival of the George Washington at Havana, Her nandez & Chavitau altered the bill of lading, on their own mere motion, by inserting after the words “ at the port of Havana,” the words, “ or a marketand directed the cargo to be delivered to Gerardo Patrullo, at Laguira, stating that this order was given in consequence of the “ low prices [115] of flour and pork at Havana.” Here is another discrepancy in this transaction. The fluctuations of the market could not affect De Wolf, as Levy had agreed to pay a stipulated price for the cargo. Much less could it concern Levy ; for he was made safe by his contract with the Spanish government. The cargo, when in transitu, was most clearly not to a market, but to a Spanish depot of arms.
The vessel, in pursuance of an order of Hernandez & Chavitau, with an altered bill of lading, which was originally special, but was, by the alteration, made general in its terms, left Havana, but with special instructions to deliver the cargo, either at Laguira or Porto Cavello ; and when near the first mentioned port she was captured by a Venezuelan privateer, her cargo libelled as Spanish property, and condemned, as such, by a Vice Admiralty Court of the Republic of Venezuela, which was at war with Spain. This case arises out of the claim made by the party ostensibly injured, against the insurers, for a total loss.
Vessel proceeds, and is captured, and cargo condemned.
The insertion ¿f the words, “ and a market,” extended the authority of the captain to the utmost limits of his discretion. The policy, and the contract with Levy, referred to three ports only, either of which was to be designated by Levy; but here was a general latitude given by Hernandez & Chavitau. on the face of the bill of lading which extended from island to island, to dispose of the cargo, although proved that it was disposed of to Levy, before it left New York. The alteration • of the bill of lading increased the risk; for that very alteration, from its having been made' in a belligerent port, and by a belligerent, was calculated to create suspicion of an attempt to mask the property under a neutral flag. That suspicion would add to the chances of its condemnation, on the ground that innocence never seeks concealment. The republic condemned the cargo, as belonging to her enemy, and released the ship as the property of her friend. In this, she did precisely what an American Court would have done, in similar circumstances.
Alteration of bill of lading an excess of authority,
And increased the risk.
The loss is positive, and it must fall either on our own citizens, or on the citizens of Spain, or a citizen of Denmark. The Vice Admiralty Court of Venezuela adjudged the pro[116] perty.to be Spanish, and condemned it as "such. .It was captured when entering a Spanish port, and a depot of arms. 'I'ÍJie descriP-tiorl °,f -the carg°, as well as its destination and dbjeot, viewed in connection with the-letters of Hernandez &'Chavitau> and the suspicious interlineation, made by them on the .bill of lading, together with .their order on the back of it, clearly justified the condemnation. Neither party, for aught we see, has complained that this was an unjust sentence.
[115] The evidence justified the condemnation.
[116] When foreigners, and more especially belligerent foreigners, (and I consider Levy to have stood in the .latter character, for he had violated his obligations of neutrality, by committing himsetf with .Spain, flagrante bello,) seek the aid of our citizens to effect insurance, under the specious mantle of American property, they have no right .to complain of the strictness of our Courts in scrutinizing their acts, and in protecting our insurers against frauds upon the American flag.
-This property Ayas warranted to be American. It was adjudged by a foreign tribunal to be Spanish. If the decree of that tribunal was correct, the warranty Ayas false; and, consequently, the policy has been broken on the part of the assured ; and there is an end of the question. The policy became void.
Insurers are necessarily strangers to the secret, objects of other parties, who may frequently be stimulated by the hope of gain, .to combine for the purpose of covering belligerent property, under the semblance of neutrality. In such cases, all the circumstances Ayhich give character to the property insured, and develope the ulterior views and intentions of the parties, are wholly under the control of the insured, who may, and probably will, forever be influenced by interest to suppress or conceal such papers as throw light on the merits of the case. The insurers, at common law, have no po w-er to .compel a disclosure ; and the .insured, it may be supposed, Avill cautiously conceal every fact which militates against himself.
But, as it has been settled, in this place, that .the sentence of a foreign Court of Admiralty shall not be received as con-[117] elusive of .the character of the voyage, the decree of the Venezuelan Court can only he taken, in .this case, as prima facie evidence that the cargo was .Spanish property. A summary of the facts, with which 1 shall conclude, will show how far that decree is sustained or impeached by the evidence given in the Supreme Court.
Spain was engaged in a war with the republic of Venezuela. Levy, at that time, a resident merchant of a neutral island, engaged with the Spanish government, to supply the Spanish forces with certáin provisions and clothing. He came to New York, and entered into a bargain to purchase of De Wolf, a citizen of the United .States, articles corresponding to those which he had engaged to deliver the Spanish Intendant. De Wolf purchased the articles, and insured the property as American; and ,by an agreement with Levy, fixing the price of the freight, shipped the articles on board his own vessel, to be delivered a.t a Spanish port, a military and naval depot.
Evidence given in the supreme court to support the condemnation
The vessel arrived at Havana, and was ordered to a second military depot, with her cargo; and on her voyage thither, she was captured by a Venezuelan cruiser, and her cargo condemned as enemy’s property.
The letters oí De Wolf, of Levy, and of Hernandez & Chavitau, carry with them strong evidence of a fictitious dress. Levy contracted, in New York, for the property; and the port of designation was placed at his disposition. Yet you hear nothing of him after he .is lost sight of as the purchaser in New York. There is evidently a studied concealment in the papers, of Levy’s agency in this business; and the conclusion, .to my mind, is irresistible, that the ship was not ordered from .Havana to a.“ better market,” as Hernandez & Chavitau allege ; -but, in fact, she was directed to Laguira, by order of the Spanish Intendant. Levy was under the control of the Intendant. The provisions must ht/ve been known, on the arrival of the ship at Havana, as articles purchased on Levy’s contract, for the use of the Spanish government; and it is too much to suppose, that any nation, at war, would for a moment permit an agent or con[118] tractor to divert, or control, at his mere will, munitions expressly purchased for the use of its army or navy, The property has been adjudged to be Spanish, by a foreign tribunal, and the evidence in the case confirms the correctness of that decision.
I, therefore, am of opinion, that as the warranty has not been sustained, the judgment in the Court below should be reversed!
Erwin & Thorn, Senators, concurred.
.The other members of the Court concurring in the result of the opinions delivered by The Chancellor and Bronson, Senator—
For affirmance, 20—For reversal, 3.
It was thereupon ordered, adjudged and decreed^ that the judgment of the Supreme Court be affirmed ; and that the plaintiffs pay to the defendant his costs, &c., and that the record he remitted, &c.