creditors no right to appear before the commission as claimants.1 It may well be that the American injury was considered too remote. In the Bance case before the American-Venezuelan commission of 1903, the American creditors of a bankrupt Venezuelan were not recognized as individual claimants when a receiver in bankruptcy representing all the creditors had been appointed.2

3

On the other hand, American intervenors in a claim, basing their right to a share in the award upon their position as creditors of the original claimant in the transaction out of which the claim arose, were protected as to their proportionate interest by the umpire of the American-Venezuelan commission in the Turini case, the original claimant having died and his administratrix appearing as the claimant of record. The repeated expressions of arbitral commissions, in cases where the original claimant had died, to the effect that the administrator and not the heir should appear as the party claimant, is often founded on the express ground that creditor beneficiaries of an award should be protected. In some cases, it has been expressly stated that the beneficiaries of an award, be they heirs or creditors, must prove their citizenship.5 It is evident that creditors' interests, where possible, have usually been protected.

Under the Indian Depredation Act of 1891, assignees and creditors of the claimant were held to have no rights. The intent of the French

6

1 Mora and Arango (U. S.) v. Spain, Feb. 12, 1871, Moore's Arb. 2336; Benner, ibid. 2335; Rodriguez, ibid. 2336.

2 Bance (U. S.) v. Venezuela, Feb. 17, 1903, Ralston, 172.

3 Turini (U.S.) v. Venezuela, ibid. 51, 62. In the Alsop claim against Chile, Dec. 1, 1909, Award July 5, 1911, it seems that American and even Chilean creditors were permitted to share in the award, the award being made without inquiry into the nationality of the ultimate recipients.

4 Wiltz, Adm. (France), v. U. S., Jan. 15, 1880, Moore's Arb. 2244, 2248; Baynum (U. S.) v. Mexico, July 4, 1868, Moore's Arb. 1271; supra, p. 633.

5 Wulff (U. S.) v. Mexico, July 4, 1868, Moore's Arb. 1354; Wiltz (France) v. U. S., Jan. 15, 1880, ibid. 2246. See also Kane's notes on . . questions decided by . . . Commissioners under convention with France, July 4, 1831, Phila., 1836, p. 21. It seems that while equitable owners had to prove their citizenship, assignees for the benefit of creditors were excused from proving the citizenship of the creditors.

Labadie v. U. S., 32 Ct. Cl. 368. But see McKenzie v. U. S., 34 Ct. Cl. 278, 285, and dissenting opinion of Nott, J., 287.

Spoliation Acts was to benefit the next of kin of the original sufferers, and to exclude creditors, legatees and assignees.1

$297. Mortgagees.

Mortgagees are secured creditors in a special sense. A mortgage is in form a conveyance, vesting in the mortgagee upon its execution a conditional estate, which becomes absolute upon breach of the condition.2 The Department of State in the exercise of its discretion has on several occasions exercised good offices on behalf of the equitable interest of American mortgagees of foreign-owned property. This has been particularly true of American bondholder-mortgagees of foreign railroads.

International commissions by weight of authority have shown a disinclination to allow American mortgagees to appear as claimants. for damages arising out of injuries to the property of their debtor mortgagors. This conclusion may be defended on the ground that the mortgagee is too indirectly affected by such injury to authorize his appearance as a claimant. In the case of Rodriguez before the Spanish-American Claims Commission of 1871, the embargo of an estate which was mortgaged to the claimant, an American citizen, but of which he had neither the legal title nor possession, was held to afford no ground for a claim of damages.3 A similar result was reached by the British-American commission of 1871, on the claim of a British mortgagee of property destroyed by the United States army. On the other hand, this same commission allowed the claim of the mortgagee of a British vessel wrongfully captured by a United States cruiser during the Civil War, and subsequently condemned and sold.5

1 Blagge v. Balch, 162 U. S. 439, 31 Ct. Cl. 460; Van Wagenen, Adm., v. U. S., 31 Ct. Cl. 175, in which, however, it was said, as dictum, that under certain possible conditions, creditors, as beneficiaries under a deed of trust, may have a claim upon the recovery.

3

2 Hutchins v. King, 1 Wall. 53, 57.

3 Rodriguez (U.S.) v. Spain, Feb. 12, 1871, Moore's Arb. 2336.

Bain (Gt. Brit.) v. U. S., No. 231, May 8, 1871, MSS. inserted in briefs of Spanish Treaty Claims Com: VI, 243–247.

5 H. J. Barker, mortgagee, No. 432, and Overend, Gurney and Co., mortgagees, No. 433 (Gt. Brit.) v. U. S., May 8, 1871, Hale's Rep. 141-148. See also the Texas Star v. U. S., Act of June 23, 1874, Moore's Arb. 2360, 2366.

1

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 Supra, p. 643.

1

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.1 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.

3 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.