Questions of Public Law (1737)

Cornelius van Bynkershoek

Whether it Is Lawful to Insure Enemy’s Property

IN kingdoms and republics which encourage commerce, there is, next to contracts of purchase, sale, and hire, none in more frequent use than that of insurance. It was, however, so little known in ancient days that not even its name is to be found in Roman law. The reason may be that commerce was not carried so extensively, or that the Roman navy made the seas secure from pirates, or that the magnitude of the Empire, extending over every sea which the merchants were wont to frequent, dispelled all fears of enemies. Furthermore, there was not then the same danger from the waters, for we do not cling close to the shore as they did, nor rest our ships during the winter months, but we sail our ships into mid-ocean at any season, however stormy, not knowing where fate may carry them. However, I have read in Suetonius’ life of Claudius that, at a time of great scarcity, when the people reviled him and threw crusts of bread at him, the emperor offered great inducements for the building of merchant vessels, and certain profits to the merchants, ‘taking upon himself the risk of any loss that might result from storms’. This was a kind of insurance, since, as practised nowadays, insurance is nothing else than an engagement for the security of another’s property by which the owner is liberated from the risk, which is assumed by the insurer in consideration of a certain fixed premium. Claudius, however, assumed the risk of the sea, though not that occasioned by pirates, and he did this gratuitously, not for a fixed premium; hence I have called it merely a kind of insurance.

I have premised a definition of insurance so that it would become apparent even from the definition that war by its very nature precludes the permission to insure ships, merchandise, and other goods of the enemy. For to assume the risks of the enemy is nothing else than to promote their maritime commerce, since insurance was invented in order that maritime commerce might readily be carried on at a smaller loss. Hence when we were at war with Spain, the States-General issued an edict on April 1, 1622, declaring void all insurances made and to be made by Dutch subjects on Spanish property, and laying a penalty of one hundred Flemish pounds on any one who should act to the contrary. This seems entirely proper because in every declaration of war every man is asked to do as much damage to the enemy as he can, and hence it follows that he is forbidden to be of any service. This the right of war generally requires, and the edict of the States-General of April 2, 1599 explicitly demanded it in our war with Spain. It might be argued that insurances of this kind bring more profit than loss to the insurers, and that therefore they benefit us more than the enemy. But this would be a very unsafe argument, since experience could hardly prove whether the assertion was true, whereas it is certain that such insurance aids the enemy to extend his commerce more widely. And since this is beneficial to the enemy and generally redounds to our great injury, it must in every possible way be prevented. And this reason alone would suffice, but as the edict of April 1, 1622, notes, there was a further consequence from such insurances, namely that enemy goods captured by our forces might be claimed by the underwriters; and why should they not if .the contract actually is legal? For the goods do in a measure belong to the insurers, and in respect to insured ships and cargoes the underwriters and owners are considered as on a par, as we can see from insurance policies that are printed and in everybody’s hands. If, therefore, insurers could lawfully claim enemy’s property, there would result a loss to our subjects who had lawfully captured it; and, as the aforesaid edict explains, they would thus be deterred from fitting Out cruisers with which to attack the enemy. That this is contrary to the laws of war is more than clear.

So far there is nothing objectionable in that decree of April 1, 1622; but I have discovered that on May 13, the States-General restricted the edict to apply to insurances which had been or should be made subsequent to the publication of that of April I; as if this were a fitting place to apply the Roman prohibition of ex post facto laws. From this restrictive clause it is apparent that the States-General then approved of the insurance of an enemy’s goods if it was not forbidden by a special law, for otherwise they would have annulled those contracts that had been made prior to the special prohibition, as indeed the decree of April I had declared them void. And since that decree of April I has the support of the law of war, and did not enact any new law, the supplement which later changed it should be attributed to an error and not considered binding. The clause about the penalty might well have been restricted to future cases, but not so the prohibition itself; unless perchance we hold that the practice of insuring enemy’s property had grown so prevalent, that a long continued custom had established the practice. Nevertheless, even if we had very many examples of the insuring of enemy’s property I would not consider it a custom so well established as to have the force of law, unless it were confirmed by an uninterrupted series of judicial decisions.

Therefore the States-General acted in accordance with the laws of war when on December 31, 1657, they decreed that it was not permissible to insure the property of the Portuguese, with whom we were then at war. But I doubt the legality of the general prohibition which they added against insuring any property on the way to or from Portugal; for if such property belonged to subjects of the States-General or of some friendly power, there is no reason to prohibit their being insured, since the trade with Portugal was not prohibited by the decree, except that in section 2, their trade in contraband with us and with others was prohibited. And if the property belongs to subjects of some other power, we will insist even more upon the right of insuring, since we have not the right to prevent commerce between our enemies and their friends. Hence this prohibition should have been restricted to the commerce in contraband. Again, on March 9, 1665, the States-General issued a similar edict in almost the same words against the English, with whom we were then at war, prohibiting the insurance of ships and goods going to or coming from England. And in section 13 of our declaration of war against France on March 9, 1689, the States-General forbade the insurance not only of French ships and property but of any ships and goods going to or coming from France; a general prohibition which therefore concerns foreigners, and interferes with legitimate commerce of foreign as well as our own subjects. In this way edicts are copied one from another, so that when an error subversive of international law has once found its way into one it continues to be copied, and no one takes the trouble to rectify it.

On the whole it appears from later edicts of the States-General also, that it is unlawful to insure the property of enemies. And since the practice is so general, I wish that this prohibition had been adopted in general laws as well as in the special decrees that the Dutch have issued from time to time concerning this kind of contract, and I would that Straccha, Santerna, and other semi-barbarians who have written about insurance had not omitted this subject entirely, contenting themselves with observing that unlawful goods like contraband could not be insured. We may put our opinion in this form; that it is unlawful to insure ships and goods which may be seized and condemned by the law of war, whatsoever they may be, but I see no reason for prohibiting the insurance of property which may not lawfully be seized and condemned.

Let us consider what some of our authorities have said about the insurance of property that may be lawfully condemned. Grotius gave the opinion that a person who insured contraband goods, not knowing them to be such, was not liable to pay the loss. Again, two lawyers following the opinions of the merchants of Antwerp and Middelburg, have held that, if a person insures property on a general policy which does not name the owner, or, as the Roman law phrases it ‘for the owner whosoever he may be’, and if the owner proves to be an enemy, the insurer is not bound, since such a general formula is not considered to include enemies. But, in my opinion, even if it is expressly stated that the goods being insured are enemy’s or contraband, the insurer is not liable, since the contract is void, and the contracting party may act at his own pleasure with such a contract, for a case that depends wholly upon the pleasure of the parties concerned has no standing in court.