contraband goods, which is illicit jure belli. But to render the insurance in either case valid, the nature of the trade and of the goods should be disclosed to the insurer, or there should be just ground, *from the circumstances *269 of the trade or otherwise, to presume that he was duly informed of the facts.a (3.) Of seamen's wages. The commercial ordinances have generally prohibited the insurance of seamen's wages, and the expediency of the prohibition arises from the consideration, that if the title to wages did not depend upon the earning of freight by the performance of the voyage, seamen would want one great stimulus to exertion in times of difficulty and disaster. Though there be no statute ordinance on the subject in the English law, yet it is everywhere assumed as a settled principle in the marine law of England, that seamen's wages are not insurable. But the goods that seamen purchase abroad with their wages, do not fall within the reason, nor do wages ■ Parsons, Ch. J., in Richardson v. Maine Ins. Co. supra. In New-York, it has been held, that the underwriter is presumed to assume the risk of contraband of war, without a previous disclosure of the nature of the cargo; and on the ground of that presumption the contraband cargo need not be disclosed. Seton v. Low, 1 Johns. Cas. 1. Juhel v. Rhinelander, 2 ibid. 120. 487. These cases were decided as early as 1799; but the principle does not appear to be sound, and the authority of the cases may now be considered as overruled. Right and duty are correlative. As Sir Wm. Scott observed, there are no conflicting rights between nations at peace. If trade in contraband is unlawful by the laws of war, the neutral violates his duty if he engages in it, and the belligerent exercises a lawful right when he seizes and confiscates the articles. An insurance of a voyage laden with contraband articles is insurance on an illegal voyage. Mr. Duer, in bis Treatise on Insurance, vol. i. 751-756, exposes the error of Vattel, and of the American decisions referred to in the text, with conclusive force. But though the better opinion on sound doctrine be, that such a trade is unlawful for a neutral, yet it is the prevalent rule in continental Europe, that an insurance made in a neutral country on articles contraband of war and destined to a belligerent power, is permitted, and seems to be an exception to the general principle, that an insurance in a neutral country on a trade prohibited by the law of nations, is illegal and void. This point remains, however, to be settled in the jurisprudence of England and of the United States, though it has received the sanction of the courts of law in New-York and Massachusetts, already alluded to. See Duer on Insurance, vol. i. 759-761. b Magens on Insurance, 18. Lord Mansfield, in 3 Burr. Rep. 1912. Webster v. De Tastet, 7 Term Rep. 157. Lord Stowell, in 1 Hagg. Adm. Rep. already earned and due; and yet if a seaman, at an intermediate port, by a refusal to proceed, coerces the master to have his wages already earned insured, such a policy has been held void in the French courts.a (4.) Of freight, profits and commissions. In France and Spain, freight not earned cannot be insured, and for the same reason that seamen's wages are not insurable. (1) Several of the commercial tribunals wished, however, to adopt the practice of the English, and give a greater extension to the liberty of insurance. To this it was answered, that risk was of the essence of the contract, *270 and that there *could be no real loss of that which is a nonentity, and had no certain existence, as future contingent freight and profits. By leaving the freight to be earned uncovered, the master has stronger inducements to be vigilant in the preservation of the ship and cargo. This is the reason assigned by Cleirac; but Emerigon says, the true ground of the prohibition is, the uncertainty of the existence of any future freight. In England and the United States, future, or expected and contingent, and even dead freight, is held to be an insurable interest. It is sufficient that the insured had an interest in the subject matter from which the freight is to arise. It is necessary, however, that the ship should have actually begun to earn freight, in order to entitle the insurer to recover, for, until then, the risk on the freight does not commence. An inchoate right to freight is an insurable interest. The risk generally begins from the time the goods, or part of them, are put on board; and if the ship has been let to freight under a charter-party of affreightment, Emerigon, tome i. 236. b Boulay Paty, tome iii. 482, 483. • Ord. de la Mar. du Fret. art. 15. Code de Commerce, art. 347. Cleirac, sur le Guidon, c. 15. art. 1. 1 Emerigon, 224. Ord. of Bilboa, c. 22. But freight already earned and due may be insured, for it has then ceased to be uncertain. Pardessus, Cours de Droit Com. tome. iii. n. 764, 765. (1) Freight, as a subject of marine insurance, has been defined to be "the remuneration to be paid to the ship-owner for the hire of his ship, under an express contract of affreightment for a certain voyage, or the price to be paid to him for the carriage of goods, irrespective of such voyage. 1 Arnold Ins. 201. It also includes the benefit which the ship-owner expects to derive from the carriage of his own goods in his own ship. Ibid. the right to freight commences, and is at risk so soon as the ship breaks ground; and if the charterer omits to put on board the expected cargo, and the ship performs the voyage in ballast, the right to freight is perfect. But when the freight arises from the transportation of the goods, it commences when the goods are put on board, and the policy attaches to the extent of the goods on board, or ready to be shipped.a (1) *Profits are, equally with freight, a proper subject *271 of insurance. The right to insure expected or contingent profits is settled in England, and has received repeated and elaborate confirmation. They are likewise, in this country, held to be an insurable interest. The consignee of goods consigned to him for sale, has an insurable interest therein to their full value, and he may insure them in his a Tonge v. Watts, Str. Rep. 1251. Thompson v. Taylor, 6 Term Rep. 478. Forbes v. Aspinall, 13 East's Rep. 323. Davidson v. Willasey, 1 Maule & Selw. 313. Riley v. Hartford Ins. Company, 2 Conn. Rep. 368. Livingston v. Columbian Ins. Company, 3 Johns. Rep. 49. Davy v. Hallett, 3 Caines' Rep. 16. Mr. Benecke, in his Treatise on the Principles of Indemnity, 57, says, that the practice of insuring ship and freight separately, is attended with many difficulties, and that the best, if not the only way to obviate them, and to put the owner, under all circumstances, in the same situation in which he would have been in case of a safe arrival, would be, to insure the ship and freight jointly, as one individual risk, in the same policy. (2) In Adams v. Pennsylvania Ins. Company, 1 Rawle, 97, in the case of a valued policy on freight, there was specie on board belonging to the owner of the ship, and the ship was lost before any cargo was purchased, or contracted for, or procured; and it was held, that there was no claim upon the insurer, for there was only a reasonable expectation of profit upon a cargo expected to be procured and shipped. The contingency of expected freight was too remote. b Grant v. Parkinson, cited in Park on Insurance, 354, 6th edition. Le Cras v. Hughes, ibid. 358. Craufurd v. Hunter, 8 Term Rep. 13. Barclay v. Cousins, 2 East's Rep. 544. Hendrickson v. Margetson, ibid. 549. note. Profits must be insured as profits. 3 Neville & Manning, 819. An insurance on outfits in a whaling voyage does not terminate pro tanto with their consumption or distribution, but attaches to the proceeds of the adventure. Hancox v. Fishing Ins. Co. 3 Sumner's R. 132. • Loomis v. Shaw, 2 Johns. Cas. 36. Tom v. Smith, 3 Caines' Rep. 245. Abbot v. Sebor, 3 Johns. Cas. 39. Fosdick v. Norwich Marine Ins. Company, 3 Day's Rep. 108. (1) Where the cargo was delivered, but the ship abandoned for a total loss, and the abandonees received the freight: Held, that the owners could not recover against the insurers on freight, it having been lost by their own act, and not by the perils of the sea. Scottish Marine Co. v. Turner, 20 Eng. L. & E. R. 24. (2) See this subject illustrated, in 1 Arnold on Ins. 809. own name a Insurances on freights, profits and commissions, are required by the course and interests of trade, and have been found to be greatly conducive to its prosperity. But the doctrine that pervades the cases is, that the insured must have a real interest in the subject matter from which the profits are expected. There must be a substantial basis for the hope or expectation of profits, in order to prevent the policy from being considered a wager. Commissions are a species of profit expected to arise from the sale of property consigned to an agent or supercargo, and they are an insurable interest in England, and other countries, where insurances on profits are legal.b In France, assurances on profits are unlawful, and contrary to the code, as they were also to the ordinances of the *272 marine, *and for the same reason that insurances on freight are not allowed. The subject insured must have a physical existence, and be a substance capable of being exposed to the hazards of the sea. And yet there seems to be no more objection to the insurance of a thing having only a potential existence, than to the sale of it; and it is admitted, that the sale of the proceeds of a future vintage, or of the next cast of the net by a fisherman, is a good and valid sale. The hope or expectation of profit, in these cases, is, says Pothier, a moral entity susceptible of value, and of being sold. But in Italy, Portugal and the Hanse Towns, they are held lawful; and Santerna, and after him Straccha, and then Roccus, all show that the profits of goods may lawfully be estimated in an insurance on goods.d The English cases have required the insured to show, in an insurance on profits, that some profit would have been produced upon the adventure, if the peril to the property from which the profits were to arise had not intervened. (1) I should apprehend ■ De Forest v. Fulton Ins. Company, 1 Hall's Rep. 84. Brisban v. Boyd, 4 Paige, 17. Pouverin v. Loui. F. & M. Ins. Co. 4 Rob. Loui. R. 234. b Benecke on Indemnity, 32. • Traité du Con. de Vente, n. 5, 6. a Roccus, n. 31. 96. Santerna, de Ass. et Spons. Merc. Tract. part 3. n. 40, 41. Straccha, de Ass. Gloss. 6. n. 1. Ord. of Hamburg, 2 Magens, 213. Benecke, 35. • Hodgson v. Glover, 6 East's Rep. 316. (1) See Arnold on Ins. 240. that was the proper course, though the cases in this country have not explicitly declared that the party must show affirmatively that the goods, if they had arrived safe, would have come to a profitable market, or that the state of the foreign market was such as to have afforded, as in Grant v. Parkinson, a very strong expectation of profits. Such an expectation seems to have been assumed in the American cases. (5.) Of open and valued policies. An open policy is one in which the amount of interest is not fixed by the policy, but is left to be ascertained by the insured, in case a loss should happen. A valued policy is where a value has been set on the ship or goods insured, *and inserted in the policy in the nature of *273 liquidated damages. a If a policy on profits be an open one, there must be proof given of the amount of the profits that would probably have been made, if the loss had not happened; there would not otherwise be any guide to the jury, in the computation of the loss. In Mumford v. Hallett, it was supposed that every policy on profits must, of necessity, be a valued one, because, without the valuation, it would be extremely difficult to ascertain the amount to be recovered. A loss on the profits must be regulated by the loss of the property from which the profits were to arise. Where the ship and cargo were lost on the voyage, the whole amount of the valued profits was held recoverable, without showing that there would have been any ultimate profit if the loss had not happened. The value in the policy is, or ought to be, the real value of the ship, or the prime cost of the goods, including the incidental expenses of them previous to the shipment, and the premium of insurance. It means the amount of the insurable interest; and if the insured has some interest at risk, and there is no fraud, the valuation in the policy is conclusive between the parties; for they have, by agreement, settled the 1 Johns. Rep. 433. b Abbot v. Sebor, 3 Johns. Cas. 39. Patapsco Ins. Company v. Coulter, 3 Peters' U. S. Rep. 222. d Pothier, des Ass, n. 43. |