Cardosa v. Fireman's Fund Insurance

MUSSELL, J.

This is an action on an insurance policy to recover the sum of $5,376.20 paid by plaintiffs to the government of Ecuador as a fine or penalty for the violation of a law of that republic prohibiting the passage of fishing boats through its territorial waters without a permit so to do.

The policy, issued April 11, 1951, insures plaintiffs as owners of the “Notre Dame,” a fishing vessel, against:

“ (9). Liability for fines and penalties for the violation of any of the laws of the United States, or of any State thereof, or of any foreign country; provided, however, that the Company shall not be liable to indemnify the Assured against

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any such fines or penalties resulting directly or indirectly from the failure, neglect, or default of the Assured or his managing officers or managing agents to exercise the highest degree of diligence to prevent a violation of any such laws.”

The policy further provides that notwithstanding anything to the contrary contained therein, no liability attaches to the company directly or indirectly “for or in respect of any loss, damage or expense sustained by reason of capture, seizure, arrest, restraint or detainment or the consequences thereof or any attempt thereat. ...” It is also provided therein that “no action shall lie against the company for the recovery of any loss sustained by the assured unless such action is brought against the company within one year after the final judgment or decree is entered in the litigation against the assured, or in case the claim against the company accrues without the entry of such final judgment or decree, unless such action is brought within one year from the date of the payment of such claim,” and “The company shall not be liable for any claim not presented to the Fireman’s Fund Insurance Company, Head Office, with proper proofs of loss within six (6) months after payment thereof by the assured.”

On November 5, 1951, the “Notre Dame,” in charge of plaintiff John G. Cardosa, was proceeding from Panama to fishing banks off the coast of Peru, when it was stopped by a patrol boat of the Ecuadorian government at a point approximately five miles outside of Isla de la Plata (an island off the coast of Ecuador). An armed guard was placed on board the Notre Dame and she was escorted to the Port of Manta, Ecuador. On November 15, 1951, a fine of $5,376.20 was imposed by the Ecuadorian government under a law of that republic which forbade the entry of foreign fishing vessels into Ecuadorian waters, defined as waters including an area within 12 nautical miles measured from the line of the lowest tide at the most projecting points of the Ecuadorian coast. On November 20, 1951, plaintiffs paid the fine to obtain the release of the vessel. They were unable to secure remission of the fine which was paid by them under protest and thereafter this action was filed to recover the amount so paid from the defendant insurance company. Trial was had by the court without a jury and judgment was entered in favor of the defendant. Plaintiffs appeal from the judgment.