1869 DENT บ. SMITH. ality should continue. In Eden v. Parkison (1), it was held that a warranty of neutrality only extended to the acts of the shipowner and not to external circumstances. So that when a Dutch ship was warranted neutral and continued Dutch, but during the insurance war was declared between England and Holland, it was held that the risk continued. [Sir G. Honyman, Q.C., contrà, referred to the note in 2 Arnould on Insurance, p. 572, ed. by Maclachlan, where the editor observes that Eden v. Parkison (1) is no longer law.] The principle of the decision is not shaken, that a warranty of neutrality only extends to the acts of the insured, and not to external circumstances over which they had no control. So, although the change of nationality may have the effect, as in the present case, of greatly altering the consequences of a disaster caused by perils insured against, yet it does not really alter the risks, for on a ship becoming Russian she is not more likely than before to be wrecked; and supposing war risks not to be excluded by the policy, a change of the ship from a neutral to a belligerent nationality would not affect the policy (unless there were an express warranty) being within the risks insured against; and yet the change would greatly affect the probable results to the underwriters. It is quite out of the power of the plaintiffs, the shippers, to prevent the change of nationality; and, therefore no such implied warranty can be inferred on their part. Secondly, what law is to govern the interpretation of this policy? No doubt the English law; and it will be said by the defendants that it is sought by the assured to interpret it by the law of a foreign country. But there is a distinction between the law which is to govern the interpretation of a contract, and the law which is to be applied in determining the loss, and the extent of it, under a given state of circumstances; those must be determined by the law of the country in which the disaster takes place, or at any rate, of the country of the port of destination, which in the present case are the same. This principle is clear, although, no doubt, difficulties have arisen, as will always be the case where a contract is made in one country with reference to things to be done in another. The amount of loss must, therefore, be ascertained by (1) 2 Doug. 732. the law administered in the Russian consular court, the nationality of the ship being Russian; for by capitulations between Turkey and the Great Powers, jurisdiction is in such cases transferred from the Turkish courts to the consular courts of the country to which the ship belongs. The jurisdiction, therefore, is clear; but it will be contended on the other side that the law administered in the court was not the Russian law. [COCKBURN, C.J. The goods are pro tanto lost by perils insured against, that is, by perils of the sea, just as much as if, in consequence of the wreck, they had got into the hands of the people of an inhospitable country, who refused to give them up without payment of a large ransom. This, in effect, is what has happened. The goods came into Russian hands and became amenable to the Russian law, and certain sums are charged against them which would not have been charged by the law of some other countries.] That is really the plaintiffs' proposition,—that the loss is by one of the perils insured against; but there are one or two cases which must be noticed and distinguished in order to sustain the proposition as put by the Lord Chief Justice. [LUSH, J. The subject of the insurance, owing to the wreck, was absolutely in the power of the Russian officials,-withheld from the assured by vis major, and those officials claim a certain percentage according to what they say is the law. It is just as if the gold had, owing to the wreck, got into the hands of wreckers who claimed the sum as ransom; that would have been illegal; but if the assured could not get the gold back without the payment of the money, what does it signify whether the claim was according to law or not? It has been held that when a ship has been wrecked, and the cargo is carried off by wreckers, that is a loss by perils of the seas. (1)] It is not necessary to go so far as that, as the policy covers loss by robberies; though, no doubt, it will be contended on the other side that this loss was not by robbery. [LUSH, J. If, instead of the gold having got into the possession of the Russian officials, a suit only had been instituted in that court, the case would admit of a different consideration.] No doubt but here the plaintiffs were compelled to pay in (1) See Bondrett v. Hentigg (Holt, N. P. 143). 1869 DENT V. SMITH. 1869 DENT v. SMITH. order to regain possession of the gold: and in this view, if the authorities had merely made the demand, without any formal judgment, that would have been a loss within the policy. It may be conceded, on the authority of Don v. Lippmann (1) and Peninsular and Oriental Company v. Shand (2), though contrary to the doctrine of Story's Conflict of Laws, s. 280, that this policy, although applying to a foreign voyage, being an English contract, must be interpreted, as to all matters contemplated in it, according to the English law. But conceding this, in the present case, the events which have happened must have been in the contemplation of the parties when they entered into the contract, namely, that the ship might become Russian, and, the policy covering all risks till the gold was delivered at Constantinople, that a disaster might occur in Turkish territory during the continuance of the policy, and that in that event the jurisdiction over average or salvage losses would be in the Russian consular court, where the mode of calculating the amount of contribution would be altogether different from the English. The parties, therefore, have contracted to pay on this contingency according to the Russian mode. It may be observed that the liability to the payment of general average, under an insurance of loss from perils of the seas, is on the ground that it is a constructive loss; and, as it would appear, though there is no English case on the subject, because, inasmuch as the loss is in respect of the goods, and arises from the perils of the seas, the insurer ought to bear the loss, and indemnify the insured: Pothier Traité du Contrat d'Assurance, § 52: Jet. Moreover, the law of general average is some hundreds of years older than the law of insurance: for it is mentioned by Grotius, and is supposed to be derived from the Rhodian law; whereas the origin of insurance is disputed between London and Antwerp. In the same way particular charges have been held to be within losses by perils of the seas: Kidston v. Empire Insurance Company (3), Booth v. Gair (4), and Great Indian Peninsular Railway Company v. Saunders (5), having decided that such charges could not be recovered (1) 5 Cl. & F. 1. (2) 3 Moo. P. C. (N.S.) 272. (3) Law Rep. 2 C. P. 357. (4) 15 C. B. (N.S.) 291; 33 L. J. (C.P.) 99. (5) 1 B. & S. 41; 30 L. J. (Q.B.) 218; 2 B. & S. 266; 31 L. J. (Q.B.) 206. under the suing and labouring clause, because not incurred to avert a peril insured against. Mumford v. Commercial Insurance Company (1) is to the same effect. That the loss sustained in this particular case was covered by the policy is shewn by the consideration, that the assured himself is bound to make this contribution according to the law of the place where the misfortune happens; and the obligation is founded, not on any contract by bill of lading, or otherwise, but on the general maritime law, by reason of the community of danger in which the ship and all in it are placed: Simonds v. White. (2) The obligation which the assured comes under is the law of the place; he has no choice in the matter, for the obligation is imposed upon him by vis major. This is a contingency contemplated by the parties, and the underwriters have no more right to complain of the law of the particular place than they have of the weather. Next, was the decision of the court according to law, so as to bind the underwriters? It is difficult, if not impossible, to understand the details, owing to their minuteness; but all the witnesses were agreed that the law administered in the Russian consular court is identical with the French law; and it is conceded on all hands that where a wreck occurs in Turkish territory, the jurisdiction to inquire into and settle all claims arising therefrom is in the consular court of the country to which the ship belongs; consequently, in the present case, the Russian court had jurisdiction. The court having thus jurisdiction, the judgment appears to have been that it was not a case of general average, but of salvage, inasmuch as the ship was ultimately lost. The judgment then proceeds to adjust the salvage in a way, no doubt, very different from the English system; but there are two cases which go to shew that the underwriters are bound by such an adjustment, although contrary to the English principle. Walpole v. Ewer (3) shews that the law of the place of adjustment must govern the mode of adjustment. There the holder of a respondentia bond, having been adjudged liable to contribute according to the law of Denmark, was held entitled to recover the loss against the underwriters, although this particular average is unknown to the law of England. In Newman v. Cazalet (4) it was shewn that (1) 5 Johnson, U. S. R., 262. (2) 2 B. & C. 805. 1 (3) Park Ins. 898, 8th ed. 1869 DENT V. SMITH. 1869 DENT v. SMITH. the usage in London was to pay according to the foreign statement; (1) 4 M. & S. 141. |