Mauran v. Insurance Company, 73 U.S. 1 (1867)

U.S. Supreme Court

Mauran v. Insurance Company, 73 U.S. 6 Wall. 1 1 (1867) Mauran v. Insurance Company

73 U.S. (6 Wall.) 1

ERROR TO THE CIRCUIT

COURT FOR MASSACHUSETTS

Syllabus

1. A taking of a vessel by the naval forces of a now extinct rebellious confederation, whose authority was unlawful and whose proceedings in overthrowing the former government were wholly illegal and void, and which confederation has never been recognized as one of the family of nations, is a "capture" within the meaning of a warranty on a policy of insurance having a marginal warranty "free from loss or expense by capture," if such rebellious confederation was at the time sufficiently in possession of the attributes of government to be regarded as in fact the ruling or supreme power of the country over which its pretended jurisdiction extended.

2. Accordingly, a seizure by a vessel of the late so-called Confederate States of America for their benefit was a "capture" within the terms of such a warranty.

Mauran brought suit in the Circuit Court for Massachusetts against the Alliance Insurance Company on a policy of insurance upon the ship Marshall for one year from the 29th November, 1860, covering the sum of $8,000. The insurance, as stipulated in the body of the policy, was

"against the adventures and perils of the seas, fire, enemies, pirates, assailing thieves, restraints, and detainments of all kings, princes, or people of what nation or quality soever."

In the margin of the policy was the following:

"Warranted by the assured free from loss or expense arising from capture, seizure, or detention, or the consequences of any

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attempt thereat, any stipulations in this policy to the contrary notwithstanding."

The vessel was seized on the afternoon of the 17th of May, 1861, two or three miles inside of the bar at the mouth of the Mississippi River, on her way up to New Orleans, by the officers and crew of the steamer Music, belonging to the so-called Confederate States. Some persons on board the steamer at the time of the seizure hoisted the Confederate flag to the masthead of the Marshall and informed the captain and pilot that the ship was "a prize to the Confederate States." Verdict and judgment having been given in favor of the insurance company, the question here on error was whether this taking of the vessel by the naval forces of the so-called Confederate States was a capture within the warranty of the assured in the margin of the policy. If it was, then the loss was not one of the perils insured against, and the judgment below was right.

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MR. JUSTICE NELSON delivered the opinion of the court.

The question in the case is whether this taking of the

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vessel by the naval forces of the so-called Confederate States was a capture within the warranty of the assured in the margin of the policy? If it was, then the loss is not one of the perils insured against, as the assured, in express terms, had assumed it upon himself.

A "capture," as defined by some of the most eminent writers on insurance within the policy, is a taking by the enemy of vessel or cargo as prize in time of open war or by way of reprisal, with intent to deprive the owner of it. This was probably the primary or original idea attached to the term in these instruments. Losses of ships and cargo engaged in commerce by the public enemy were the most to be apprehended and provided against. But usage and the course of decisions by the courts have very much widened this meaning, and it now may embrace the taking of a neutral ship and cargo by a belligerent jure belli; also, the taking forcibly by a friendly power in time of peace, and even by the government itself to which the assured belongs. [Footnote 1]

Capture is deemed lawful when made by a declared enemy, lawfully commissioned, and according to the laws of war, and unlawful when made otherwise; but whether lawful or unlawful, the underwriter is liable, the words of the policy being broad enough, and intended to be broad enough, to include every species of capture to which ships or cargo at sea may be exposed. Any other rule would furnish but a very imperfect indemnity to the assured if we regard either the character of these seizures and the irregularities attending them, or the trouble, expense, and delay consequent upon the duty or burden of proving in a court of justice the unlawfulness of the act. It is never, therefore, a question between the insurer and the insured whether the capture be lawful or not. The recent case of Powell v. Hyde [Footnote 2] is very decisive on this point. In that case a British ship passing

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down the Danube was fired upon from a Russian fort and sunk. A war existed between Russia and Turkey, but none between the former and Great Britain. The policy of insurance in that case contained the warranty of the assured "free from capture, seizure," &c., upon which the underwriters relied, as here, for a defense. In answer to this it was urged for the assured that these words in the warranty related to a lawful capture or seizure by a party having authority to make it, and that inasmuch as the capture was in open violation of law and wholly illegal, it was not within the warranty, and the underwriters were therefore liable. But the court held otherwise, and determined that this term in the warranty was not confined to lawful capture, but included any capture in consequence of which the ship was lost to the insured. This same principle was again deliberately asserted by the court in Kleinworth v. Shepherd. [Footnote 3] The same question had been decided many years before by Lord Mansfield in Berens v. Rucker, [Footnote 4] in which he held the insurer liable in case of an illegal capture of a neutral vessel by an English privateer. Chancellor Kent states the rule as follows: "Every species of capture, whether lawful or unlawful and whether by friends or enemies, is also a loss within the policy." [Footnote 5] As kindred to this rule is another that the insurer is liable for a loss by capture, whether the property in the thing insured be changed by the capture or not. In every case of an illegal capture, the property is not changed, yet as between the insurer and the insured, the effect is the same as in case of a capture by an enemy in open war.

In the case of a capture under a commission from an organized government against an enemy, jure belli, to bring the capture within the policy, it is not necessary that the commission should issue from a perfectly lawful government any more than that the capture itself should be lawful. The principle is the same. An illustration will be found in the

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war between Spain and her revolted colonies in South America, which continued for many years. Our government was the first to recognize their independence, which was in 1822; but even down till this event, from the time the revolt had reached the dimensions of a civil war, the government had recognized the war and conceded equal belligerent rights to the respective parties, and the capture of the vessels of Spain by a commander under a commission by one of the colonies in the exercise of this right was recognized as legal as if it had occurred in open public war, and, as a matter of course, would have been within the marginal warranty clause of the insured in a policy of insurance. Indeed it has been so held. It will be observed that at this time, these colonies had not achieved their independence; they were yet in the heat of the conflict; nor had they been recognized by any of the established governments on either continent as belonging to the family of nations. In this connection it will not be inappropriate to refer to the case of United States v. Palmer, [Footnote 6] which was an indictment against the defendant for piracy in the capture of a Spanish vessel under a commission from one of these colonies, and which he set up as a defense. One of the questions certified from the circuit was whether the seal annexed to the commission purporting to be a public seal used by persons exercising the powers of government in a foreign colony, which had revolted from its allegiance and declared itself independent but had never been acknowledged as such by the United States, was admissible in a court of the United States as proof of its legal existence with or without proof of its genuineness. The Court held that the seal of such unacknowledged government could not be permitted to prove itself, but that it might be proved by such testimony as the nature of the case would admit. The defendant was permitted also to prove that he was employed in the service of the colony at the time of making the capture, and which, it was agreed, would constitute a defense to the indictment

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for piracy. The proof became necessary on account of the obscurity and unknown condition of this incipient state.

Another illustration will be found in a capture by a de facto government, which government is defined to be one in possession of the supreme or sovereign power, but without right -- a government by usurpation, founded perhaps in crime and in the violation of every principle of international or municipal law and of right and justice; yet while it is thus organized, and in the exercise and control of the sovereign authority, there can be no question between the insurer and the insured as to the lawfulness of the government under whose commission the capture has been made. If any presumption could properly be indulged as to the perils against which the insured would most desire to protect himself, it might well be captures by these violent and irregularly constructed nationalities. The court in the case of Nesbitt v. Lushington [Footnote 7] fitly described the character of the government contemplated in the clause respecting the restraints &c., of kings, princes, or people, namely: "the ruling power of the country," "the supreme power," "the power of the country, whatever it might be" -- not necessarily a lawful power or government, or one that had been adopted into the family of nations.

Now applying these principles to the case before us, it will be seen that the question is not whether this so-called Confederate government, under whose authority the capture was made, was a lawful government, but whether or not it was a government in fact -- that is, one in the possession of the supreme power of the district of country over which its jurisdiction extended. We agree that all the proceedings of these eleven states, either severally or in conjunction, by means of which the existing governments were overthrown and new governments erected in their stead, were wholly illegal and void, and that they remained after the attempted separation and change of government, in judgment of law,

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as completely under all their constitutional obligations as before.

The Constitution of the United States, which is the fundamental law of each and all of them, not only afforded no countenance or authority for these proceedings, but they were, in every part of them, in express disregard and violation of it. Still it cannot be denied but that by the use of these unlawful and unconstitutional means, a government, in fact, was erected greater in territory than many of the old governments in Europe, complete in the organization of all its parts, containing within its limits more than eleven millions of people, and of sufficient resources, in men and money, to carry on a civil war of unexampled dimensions; and during all which time the exercise of many belligerent rights were either conceded to it, or were acquiesced in by the supreme government, such as the treatment of captives, both on land and sea, as prisoners of war; the exchange of prisoners; their vessels captured recognized as prizes of war, and dealt with accordingly; their property seized on land referred to the judicial tribunals for adjudication; their ports blockaded, and the blockade maintained by a suitable force, and duly notified to neutral powers the same as in open and public war.

We do not inquire whether these were rights conceded to the enemy by the laws of war among civilized nations, or were dictated by humanity to mitigate the vindictive passions growing out of a civil conflict. We refer to the conduct of the war as a matter of fact for the purpose of showing that the so-called Confederate states were in the possession of many of the highest attributes of government, sufficiently so to be regarded as the ruling or supreme power of the country, and hence captures under its commission were among those excepted out of the policy by the warranty of the insured.

We could greatly extend the opinion upon this branch of the case by considerations in support of the above view, but the question has undergone very learned and able examinations in several of the state courts, deservedly of the highest

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eminence, and which have arrived at the same conclusion, and to which we refer as rendering further examination unnecessary. [Footnote 8]

Judgment affirmed.

Dissenting, the CHIEF JUSTICE and MR. JUSTICE SWAYNE.

NOTE. At the same time with the preceding were argued and adjudged four other cases by the same plaintiff against other insurance companies, all four being adjudged in the same way as the one above reported. In two of them, the policies and warranty were in the same language as in that case. In two others there was a difference in the marginal warranty of the insured in this, that while he warranted free from loss or expense by capture &c., "ordinary piracy" was excepted, so that if the loss was on account of a capture or seizure by pirates, the insured would have been entitled to recover. But NELSON, J., giving the judgment of the Court, observed that as the Court had arrived at the conclusion that the capture of the vessel was under the authority of a quasi-government, or government in fact (the ruling power of the country at that time), it was to be held to be within the warranty or exception in the marginal clause. Dissenting, the CHIEF JUSTICE and SWAYNE, J.

[Footnote 1]

26 Phillips on Insurance, §§ 1108-1109; Arnould on Same, 808, 814; 2 Marshall on Same, 495, 496, 507; Powell v. Hyde, 5 Ellis & Blackburne 607.

[Footnote 2]

Already referred to; 5 Ellis & Blackburne 607.

[Footnote 3]

1 Ellis & Ellis 447.

[Footnote 4]

1 Blackstone 313.

[Footnote 5]

3 Commentaries 304-305.

[Footnote 6]

16 U. S. 3 Wheat. 610.

[Footnote 7]

4 Term 763.

[Footnote 8]

Dole v. New England Mutual Ins. Co., 6 Allen 373; Fifield v. Ins. Co., 47 Pa.St. 166; Dole v. Merchants' Marine Ins. Co., 51 Me. 464.