general rule based on the broad and intelligible principle, that where the contract is founded on a consideration clearly illegal, neither party shall be allowed a locus standi so as to receive any assistance in a court of justice. (m) General docillegality of trine of the risk as it affects the policy. If premiums have not been paid, the underwriter cannot sue the broker In further application of this principle the courts have also determined that, where the premiums have not been paid, the underwriter cannot sue the broker for them in cases where the policy, for effecting which they are claimed, is in its language large enough to comprise an illegal adventure, and was intended by the assured to be applied terms, large thereto. (n) In the case last cited, in reference to a point that had been made in the argument, viz. that, consistently with the words of the policy, the adventure might have been legal, and the underwriter had no means of knowing that it was not: Lord Ellenborough said, "The policies being large enough to cover an illegal adventure, and an illegal adventure being, in fact, intended to be covered by them, if the plaintiff (the underwriter) really meant to protect that adventure, his subscription was illegal, and consequently his present demand, being grounded on an illegal consideration, cannot be sustained. If he did not mean to protect that adventure, but supposed that some other lawful adventure was intended by the assured, then, admitting the subscription to have been an innocent act on his part, there will be no consideration at all to support his present demand." (o) The principles on which the foregoing decisions depend are, 1. That no court of justice can interpose to assist either of the parties to an illegal contract; 2. That in pari delicto potior est conditio possidentis. (m) Per Lord Ellenborough in Palyart v. Leckie, 6 Maule & Sel. 293. (1) Jenkins v. Power, 6 Maule & Sel. 283. (0) Per Lord Ellenborough in Jenkins v. Power, 6 Maule & Sel. 289. for them, wherever the policy is, in its enough to comprise an illegal risk, and was, in fact, intended to be apJenkins v. plied thereto. Power, Principles on which these de cisions depend. Voyages and trading illegal by the revenue laws of the United Kingdom: smuggling adven tures. on property SECT. II. — Insurances on Voyages or Traffic illegal by the ART. 1. Risks illegal by the Revenue Laws of the United § 261. The most extensive branch of illegal traffic is that which is prohibited by the revenue laws of the state; in other words, the smuggling trade. It is a clear, settled, and universal principle, that an insurance on property intended to be employed in carrying on All insurances trading adventures contrary to the revenue laws of the state where the contract is made, or sought to be enforced, is void. No court, consistently with its duty, can lend its aid to carry into execution a contract which involves a violation of the laws that court is bound to administer. (p) concerned in voyages or trading adventures prohibited by our own Revenue Laws declared void, c. 86. s. 48. For goods, the export or import of which is either pro- c. 86. ss. 63. All insurances, therefore, made or sought to be enforced in this country on goods, the exportation or importation of which is prohibited by the revenue laws of the United Kingdom, are void on the principle just laid down, and they have also been declared so by a variety of acts passed at different times for the prevention of smuggling, the provisions of which are now consolidated by the 8 & 9 Vict. c. 87., the last "Act for the Prevention of Smuggling," the 48th section of which not only avoids the insurance, but imposes a penalty of 5007. upon the parties to the contract, if made in this country. In order to ascertain what goods they are, the importation or exportation of which is now either prohibited altogether, or restricted, except upon payment of certain fixed or ad valorem duties, reference must be had to the last "Act for the general Regulation of the Customs," the 63rd and 112th sec (p) Emerigon, chap. viii. sect. 5. vol. i. p. 215. Kent's Comm., vol. iit. p. 262. ed. 1844. tions of which contain full tables of prohibitions and restric- Voyages and tions inwards and outwards. (q) trading illegal by the revenue laws of the United King dom: smuggling adven Except as contables, all restrictions and tained in these prohibitions on export and im Except as mentioned in these two tables, there are no articles the importation or exportation of which is now prohibited in this country, or of which, consequently, the insurance tures. would be void, as made in contravention of the revenue laws. From a misconception of the true principles of commercial prosperity, the import and export, and consequently the insurance of many articles was absolutely prohibited, which now form lucrative sources of our revenue, or important branches of our foreign trade. Thus it was for a long time considered to be of vital importance to the trade of this country, that all exportation of wool should be absolutely prohibited, and all insurances effected on exported wool were declared to be void (r); this impolitic prohibition continued down to the year 1825, when Mr. Huskisson, amongst many other commercial reforms, succeeded in procuring its total abolition. (s) § 262. But although the subjects of every state are thus bound by all those positive laws which their own governments may from time to time have seen fit to establish. for restraining the freedom of commercial intercourse, and interfering with the natural course of mercantile enterprise, yet they are not by any means obliged to pay the same respect to those laws which foreign states have enacted for similar purposes. Accordingly it was long ago declared by Lord Mansfield, and has never been doubted to be the clear rule of English law since his time, that this country "pays no attention to the revenue laws of another state," and, therefore, that no insurances can be void merely because effected on property embarked in enterprises which those laws would prohibit. (t) port, as far as relates to Great Britain, are now abolished. But this country pay revenue laws of foreign states. no attention to (9) 8 & 9 Vict. c. 86. ss. 63. 112. These tables are inserted in the Appendix. art. "Wool," for further information (t) Lever v. Fletcher, Park on Ins. (r) By 28 Geo. 3. c. 38. s. 45. See 505. 8th ed. See also Planché v. Marshall on Ins. 54, 55. Fletcher, Dougl. 238. Voyages and trading illegal by the revenue laws of the United Kingdom: smuggling adven tures. Decisions of Lord Mansfield, establishing and confirming this principle. The same prin ciple sanctioned ture in the Wager Policies' So far has this principle been carried in English law, that Lord Mansfield in one case held that an insurance on an adventure in which it was manifestly and avowedly intended to defraud the revenue of a foreign state was not illegal, though fictitious papers were fabricated for the purpose of carrying out the fraud (u); and his lordship gave the same judgment in another case, in which the trade insured was carried on by British subjects, not only in fraud of the revenue laws of the foreign state, but even against the express conditions of a treaty to which Great Britain and the foreign state were parties. (v) The legislature itself appears to have sanctioned the same by the legisla principle, by permitting the practice of insuring "without further proof of interest than the policy," to continue in force for the purpose of facilitating the smuggling trade in bullion with the colonies of Spain and Portugal; and this by a clause of the very act which abolished the practice for almost all other purposes, as impolitic and immoral. (w) Doubts of foreign writers as to the morality of Lord Mansfield's rule. The rule defended. Grave questions have been raised by many able writers as to the morality and justice of this rule of law: In France, Valin (x), Emerigon (y), and Pardessus (z), admit such insurances to be valid, but ground their validity chiefly on the concurrent usage of all commercial nations: Pothier, on abstract principles of morality, vehemently condemns the practice (a), and his views have been ably supported by Mr. Marshall in this country (b), and, on the other side of the Atlantic, by Chancellor Kent (c) and Mr. J. Story. (d) I confess that the reasonings adduced by these eminent persons against the rule as established in this country by (u) Planché v. Fletcher, Dougl. 230. (v) Lever v. Fletcher, Marshall on Ins. 56. Park on Ins. 507. 8th ed., but query as to the soundness of this decision. (w) The clause is the third section of the 19 Geo. 2. c. 37. (a) Valin, Comment on Ordinance de la Marine, tit. vi. art. 49. vol. ii. p. 389. ed. 1828. (y) Emerigon, chap. viii. sect. 5. vol. i. p. 216. ed. 1827. (z) Pardessus, Cours de Droit Com., tom. iii. art. 772. ed. 1841. (a) Traité d'Assurance, No. 58. (b) Marshall on Ins. 55. (c) Kent's Comm., vol. iii. pp. 265 —265. ed. 1844. (d) Story, Conflict of Laws, 332., and on Agency, 159, 160. Lord Mansfield, and universally acted on in practice, do not Voyages and trading illegal appear to me to be convincing: may it not with great by the revenue fairness be contended, that this disregard to the prohibitory United Kinglaws of other states, is founded on the broad principle that all such laws are themselves violations of that primary law of nature and of nations, which declares that all communities of men shall have free and unshackled liberty to exchange with one another whatever commodities they please, in whatever way their interest may dictate? (e) As far as any government may, for its own purposes, have seen fit to interfere with this dictate of natural law, its subjects, of course, are bound by the regulations it has established, but no further; nor are they amenable to the municipal law of their country for endeavouring to carry on and protect a commerce only prohibited by rules which are established in opposition to its true interests. dom: smuggling adven. tures. The assured cannot recover on policy cover the risk on ship or goods engaged in trade prohibited by foreign revenue laws, The ship or the goods thus engaged in the foreign smuggling trade, are, of course, liable to seizure and confiscation by the foreign government: this liability materially increases the effected to risk of the adventure; and ought, therefore, on the plainest principles of equity, to be disclosed to the underwriter at the time of effecting the insurance. Hence the rule is well established, that the assured cannot recover on policies effected for the purpose of protecting a trade prohibited by foreign revenue laws, unless the underwriter were fully informed of the nature of the risk. (ƒ) Pardessus has raised the question whether if the contract of insurance were made in the country whose revenue laws are violated by the traffic it is effected to protect, such contract can nevertheless be enforced in the country of the assured: he is clearly of opinion that it might (g); but as such con (e) See Lampredi, Del Commercio dei Neutrali, part i. sect. 1.. cited in Azuni Dritto Maritimo dell' Europa, part ii. cap. 2. art. i. vol. ii. pp. 4750. ed. 1797. See also Emerigon, chap. viii. sect. 5. vol. i. p. 216., and Pardessus, Cours de Droit, tom. iii. No. 772. and tom. vi. No. 1492. (f) Emerigon, in the opinion with Ꮓ Ꮓ which he favoured Valin upon this (g) Pardessus, Cours de Droit unless the un derwriter were informed of the nature of the risk. Query, whether if such policy were made in the foreign country whose revenue laws were violated by the trade it is effected to |