US SUPREME COURT DECISIONS

LIVINGSTON & GILCHRIST V. MARYLAND INSURANCE COMPANY, 10 U. S. 274 (1810)

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U.S. Supreme Court

Livingston & Gilchrist v. Maryland Insurance Company, 10 U.S. 6 Cranch 274 274 (1810)

Livingston & Gilchrist v. Maryland Insurance Company

10 U.S. (6 Cranch) 274

Syllabus

The assured are not understood to warrant that the whole cargo is neutral, but that the interest insured is neutral.

The right to abandon may be kept in suspense by mutual consent

The effect of a misrepresentation or concealment upon a policy depends upon its materiality to the risk, which must be decided by a jury under the direction of a court.

If a vessel take on board papers which increase the risk of capture, and if it be not the regular usage of the trade insured to take such papers, the nondisclosure of the fact that they would be on board will vacate the policy.

If the interest of one joint owner of a cargo be insured, and if that interest be neutral, it is no breach of the warranty of neutrality if the other joint owner, whose interest is not insured, be a belligerent.

If foreign laws and regulations respecting trade be not proved to have been in writing as public edicts, they may be proved by parol.

Error to the Circuit Court for the District of Maryland in an action of covenant upon a policy (of insurance against capture only) upon goods laden on board the ship Herkimer from Guyaquil, or her last port of discharge in South America, to New York; the goods were warranted to be American property, "proof of which to be required in the United States only." The ship and cargo were captured by a British ship of war and condemned at Halifax as prize.

The defense set up by the underwriters was

1. That one Baruro, a Spanish subject, was interested in the cargo, and that Baruro being a subject of one of the belligerents, the warranty of neutrality was forfeited.

2. That certain Spanish papers were found on board stating the cargo to be the property of Baruro, and although Baruro might not be interested in the cargo, yet these papers, not being necessary according to the usual course of the trade, were the cause of the condemnation, and as this cause proceeded from the act of the insured, the underwriters were not liable.

3. That although the interest of the plaintiffs Livingston & Gilchrist, was neutral, yet the concealment of the interest of Baruro vitiated the policy.

4. That the abandonment was not made in due time.

To these objections the plaintiffs answered

1. That Baruro was not part owner of the goods; he had only a contingent interest in the profits of the voyage. That the subject insured was only the interest chanrobles.com-redchanrobles.com-red

Page 10 U. S. 275

of the plaintiffs, which was strictly neutral property.

2. That the Spanish papers were necessary to carry on the voyage insured according to the nature and course of the trade.

3. That the interest of Baruro was not such as they were bound to disclose.

Upon the trial of the issue of non infregit conventionem, the jury found a special verdict and a bill of exceptions was taken by the plaintiffs in error to the instruction of the court to the jury that parol evidence was not competent to prove

"that according to the uniform and longstanding laws of Spain relative to the trade of her colonies in America, and especially of Peru, no goods could, at and about the time of the making the policy in the declaration mentioned, be imported into or exported from the colony of Peru from or to any other than a Spanish port in Europe, or in any other than a Spanish bottom, without a special license from the King of Spain for that purpose, and that such licenses, at and about the said time, were never granted with respect to the said colony of Peru to any but Spanish subjects, and that according to the constant course and usage of the trade to and from that colony under such licenses, it was usual and necessary for the property to appear in the said colony and at its departure therefrom as the property of a Spanish subject and of the person holding the license, to be accompanied by such Spanish papers as were necessary to give it that appearance, and to be cleared out as such from the port of departure in Peru, such licenses not being avowedly transferable, although by observing the above-mentioned formalities and precautions, American property at and about the said time might be and sometimes was imported into and exported from, the said colony by American citizens by virtue and under the protection of such licenses."

The order for insurance, which was supposed to chanrobles.com-redchanrobles.com-red

Page 10 U. S. 276

amount to a representation that the whole cargo was neutral property, was contained in a letter from the plaintiff Gilchrist to Webster & Co. at Baltimore, in which he says

"On the recommendation of Messrs. Church & Demmill, I take the liberty of requesting you to effect insurance in your city on the cargo of the ship Herkimer, Church, master, from Guyaquil or her last port of departure in South America to New York, against loss by capture only, warranted American property and free from all loss on account of seizure for illicit or prohibited trade. The owners are already insured against the dangers of the seas, and all other risks except that of capture. You will please to insure to the amount of fifty thousand dollars in valued policies. You have already had a description of the ship from Messrs. Church & Demmill, the agents of Mr. Jackson, who is the owner, and which I presume is correct. By a letter received from Mr. James Baxter, the supercargo, dated at Lima, 23 September, 1805, he did not expect the Herkimer would sail from Guyaquil until the last of February. I think proper to mention that the insurance will be on account of Mr. Brockholst Livingston and myself. Mr. Baxter and Mr. Griswold are also concerned, but the first gentleman thinks there is so little danger of capture that in his letter from Lima he expressly directs no insurance to be made for him against this risk, and Mr. Griswold is not here to consult. Both these gentlemen, as well as those for whom you are desired to make insurance, are native Americans."

The description of the ship, as given by Church & Demmill and referred to in the above letter, was as follows:

"She is a fine ship of about 400 tons burden, about three years old, sheathed and coppered to the bends, built in the State of New York, and her owner a native American citizen. She sailed from Boston on 12 May last, bound for Lima, with liberty to go to one other port in South America, not west of Guyaquil and from thence to New York."

"She has permission to trade there. "

Page 10 U. S. 277

On 5 June, 1806, the plaintiff Gilchrist, wrote to Webster & Co. at Baltimore informing them of the capture of the vessel and that the plaintiffs had sent an agent to Halifax to act in behalf of the concerned, and desiring that this information should be communicated to the underwriters, and assurances that the plaintiffs should act throughout with due regard to their respective interests. He then says

"I should like them to approbate the owners in taking every measure they may judge best for our mutual interest, without prejudice to our right. I ought likewise to mention that one of the owners has also gone in her, so the underwriters will observe every measure calculated to protect their and our interest has been speedily pursued."

This letter was laid before the underwriters, who returned it with their answer endorsed thereon "read and approved."

On 22 August, 1806, after the condemnation in the court of vice-admiralty, the plaintiffs abandoned to the underwriters.



























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