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In the Heny case, it has been noted that the equitable owner of injured property was considered the real claimant, and, as will presently be observed, insurers of unlawfully condemned vessels and cargoes have often received awards from international commissions.

Numerous claims were brought before the recent Spanish Treaty Claims Commission arising out of damages for injuries done to the property of a Spanish subject on which the claimant, an American citizen, held a mortgage or lien of some kind. Claimants contended that this injury to the equitable interest of an American citizen made Spain liable, whereas the Government contended that the release by Spain of the liability of the United States to the mortgagor also released any claim of mortgagees, upon whom the release is conclusive and binding, and moreover that the mortgagee's loss is too indirect to give him a standing before the commission. The Commission does not appear to have definitely disposed of this question, although claims of mortgagees were apparently all disallowed on the merits.2

§ 298. Insurers.

The question of the right of insurers to appear as claimants has on many occasions been presented for determination to the Department of State and to special and general claims commissions. Its relation to the question of citizenship either on the part of insured or insurer has served to make it an exceedingly complicated matter, and, as will be seen, the decisions of arbitral commissions afford little aid in arriving at definite rules.

The object of the contract of insurance is admitted to be indemnity to the insured, the consideration to the insurer being the premium received and his hope of recovery, should a loss occur, his spes recuperandi. When the insurance money is paid by the insurer, whether the loss has been total or partial, and whether or not there has been abandonment, the insurer so far stands in the place of the assured that he is entitled to recover whatever compensation for the loss the assured may be able to recover from any third party. The insurer 1 Supra, p. 643.

2 Special Rep. of William E. Fuller, 1907, p. 31; Brief of the Government, October 1, 1903, Briefs VI, 165–242; Claimant's briefs, ibid. VI, 1–164.

These general principles of insurance law are supported by the authorities and

is subrogated to the rights of the insured, which relate back to the time of the loss.

This view of the legal position of insurers has not always received support from tribunals acting under international treaties. Adhering to the general rule, the commissioners under the treaty of July 4, 1831 with France permitted insurers to claim the amounts they had paid, without regard to the question whether the loss was total or partial, and their right to claim, by analogy to the case of abandonment, was held to attach from the moment when the loss occurred, i. e., when their liability ceased to be contingent. The commissioners under the Florida treaty of 1819, however, regarded insurers as assignees, and recognized them as claimants only when they were entitled to a cession from the assured, i. e., only when they had paid for a total loss.1

$299. American Insurers of Foreign Property.

One of the first problems which the international position of insurers presents, is whether the American insurer of foreign property destroyed or injured under circumstances rendering a foreign government liable for the loss is entitled, after paying the insurance, to the protection of the United States in prosecuting an international claim. The question has usually arisen in cases of marine insurance. Where there has been abandonment and payment as for a total loss, there seems little doubt that the insurer is the person directly to suffer by the international wrong, and it is a logical rule that the right of indemnity is vested in the party who has been substantially injured by the act of the foreign government.

The Department of State has on several occasions taken this view

by the Supreme Court. Phillips, W., A treatise on the law of insurance, 5th ed., Boston, 1895, §§ 1722-1723; Hall v. Railroad, 13 Wall. 367; Holbrook, Adm., v. U. S., 21 Ct. Cl. 434, 437.

1 Kane's notes on some of the questions decided by the commissioners under the convention with France, July 4, 1831, Philadelphia, 1836, pp. 24-25. See also Gracie v. N. Y. Insurance Co., 8 Johns. 237, 245. That an assignment or cession is unnecessary to transfer the insured's rights to the insurer was held in Comegys v. Vasse, 1 Pet. 193. See authorities reviewed in Holbrook v. U. S., 21 Ct. Cl. 434, 437 et seq.; Mechanic (U. S.) v. Venezuela, Dec. 5, 1885, Moore's Arb. 3212.

and made representations to foreign governments on behalf of American insurers of foreign-owned property. Courts sitting as international commissions have been far from unanimous, however, in deciding this question. The commissioners under the Florida treaty decided that they would not receive the claims of American underwriters who had insured the property of foreigners, which had been illegally taken by France or Spain. A somewhat similar view, under which the right of insurers was held to be governed by the international rights of the insured, was taken by the Court of Claims in several French Spoliation cases. Where the property captured by the French was British and legally subject to condemnation as enemy property, no right against France could pass to an American insurer, for it was held that insurers could have no higher standing in court than the owners whom they insured.2

On the other hand, the nationality of the insurers alone, regardless of that of the insured was in several cases held to govern the jurisdiction of the tribunal. For example, in the claim of the Circassian before the British-American commission of 1871, which had jurisdiction of claims "growing out of injuries to the person and property of British subjects," the claim of British insurers of French confiscated cargo was allowed. Standing was also accorded by Commissioner Little of the Venezuelan-American commission of 1885 to the American insurers of Mexican property, which was alleged to have been illegally condemned by Venezuela.1

1 Moore's Arb. 4516.

2 Brig William, Haskins v. U. S., 23 Ct. Cl. 201; Schooner Vandeput v. U. S., 37 Ct. Cl. 396. This is probably good law as to the insurer's substantive rights. On the question of jurisdictional citizenship, a contrary view has been taken. See note 4.

The Circassian (Gt. Brit.) v. U. S., May 8, 1871, Moore's Arb. 3911, 3920, Hale's Rep. 141, 147. See also claim of Caroline, a wrongfully condemned Peruvian bark insured by American underwriters (U. S.) v. Brazil, Moore's Dig. VI, 748, Moore's Arb. 1342.

Mechanic (U. S.) v. Venezuela, Dec. 5, 1885, Moore's Arb. 3210, 3212. (The claim was disallowed on the merits.) See also Mechanic (U. S.) v. Ecuador, Nov. 25, 1862, ibid. 3221, in which Hassaurek made an award on the merits. See also the case of the ship Catherine, No. 513 (American insurer of illegally condemned British property), against France, in which claim was allowed, cited in Brig William, 23 Ct. Cl. 201, 206.

$300. Foreign Insurers of American Property.

Foreign insurers of American property have occasionally received the indirect protection of the United States through the claim made on behalf of the owners of the property. It is open to question, however, whether in the absence of a special treaty, they would be permitted directly to share in the distribution of any indemnity which might be received from the foreign government. Under their legal rights as insurers, they would, of course, have a right of action against the insured for any loss which they had paid, and for which the insured was indemnified by a foreign government. Under these circumstances, and considering that the flag of a vessel usually protects the cargo as well, it might conceivably happen that foreign insurers of foreign-owned cargo on an American vessel might indirectly share in the distribution of an international indemnity. The second court of commissioners of Alabama claims, under an Act giving standing to those who were entitled to the "protection of the United States in the premises," held that a British insurance company doing business exclusively in Great Britain could not appear as a claimant to the fund.1

Insurers have in most cases been given an independent standing before international commissions, based upon their own nationality, without having to prove the nationality of the assured.2 The insurers, therefore, have generally claimed in their own names. In the claim of Gerard before the British-American commission of 1871, a contention that the contract of insurance covered an illegal object was apparently not given consideration.4

Inasmuch as no written opinion was handed down, no explanation can be given for the disallowance by the Swedish-Venezuelan commis

1 Bischoff et al. v. U. S., No. 5693, class 1, Moore's Arb. 4672. Foreign insurers were excluded by their alienage from any participation in the fund under the treaty of 1831 with France, Moore's Arb. 4481.

The important exception made to this rule by the commissioners under the Florida treaty, who required proof of American citizenship by insured and insurer, has already been noted. Moore's Arb. 4516; supra, p. 648.

Hubbell v. U. S., 15 Ct. Cl. 546 (underwriters who had paid losses sustained by reason of the capture and plunder of a vessel and cargo by Chinese pirates participated in the Chinese indemnity fund); Holbrook, Adm., v. U. S., 21 Ct. Cl. 434, 442; The Sir William Peel, Gerard (Gt. Brit.) v. U. S., May 8, 1871, Moore's Arb. 3935, 3948; The Mechanic (U. S.) v. Venezuela, Dec. 5, 1885, ibid. 3210, 3212. 'Moore's Arb. 3935, 3946, 3948.

sion of 1903 of the claim of the Ydun Life Insurance Co., arising out of a policy paid to the widow of Captain Meling, who had been killed. by an act of Venezuelan authorities, and for whose death the commission had made an award to the widow.1

§ 301. Provisions of Federal Statutes.

Special provisions as to the rights of insurers have been contained. in various statutes permitting suits against the United States arising out of international claims. For example, § 12 of the Act of June 23, 1874, establishing the first court of Alabama claims, limited the right of recovery of an insurer to so much of his losses, in respect of his war risks, as "exceeded the sum of . . . his premiums or other gains upon or in respect to such war risks." 2 The Act of March 3, 1899,3 to the effect "that any French Spoliation claim appropriated for in this act shall not be paid if held by assignment or owned by an insurance company" was held to be a direction to and restriction upon the Secretary of the Treasury. This restriction has been renewed in the subsequent omnibus claims appropriation acts of 1902 and 1905, but there seems no valid reason why the claims of insurance companies should be excluded from payment in view of the fact that private insurers and underwriters have been paid, that insurance companies received payment under the appropriation act of March 3, 1891, and that insurance companies apparently received indemnities for spoliations under the treaty of 1819 with Spain, under the treaty of 1830 with Denmark, under the treaty of 1831 with France and under the treaty of 1832 with the Two Silicies.5

1 Meling (Sweden) v. Venezuela, March 10, 1903, Ralston, 954.

2 Davis' Rep., Sen. Ex. Doc. 21, 44th Cong., 2nd sess. (1877), 22-23, 115-117. The same rule seems to have been applied by the second court under the act of 1882. Moore's Arb. 4678. This same section 12 (18 Stat. L. 247), limited recovery to insurance companies lawfully existing at the time of the loss under the laws of one of the U. S. Nor was a claim admissible, when the injured party or his assignee or representative had received indemnity from an insurer, unless the loss exceeded the insurance.

330 Stat. L. 1205.

Ship Juliana, 35 Ct. Cl. 400. See 23 Op. Atty. Gen. (Griggs), 179.

'S. Ex. Doc. 74, 49th Cong., 1st sess., cited in Hearings before House Committee on Claims on H. R. 22534, 61st Cong., 2nd sess., March 30, 1910, statements of J. Henry Scattergood, pp. 45-46.

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