Chinese ports to Naples and Rotterdam respectively, payment to be made in London on arrival of goods in exchange for bills of lading and policies of insurance.

Payment was to be made at a date not later than three months from the bill of lading or upon the posting at Lloyd's as a total loss. On the outbreak of war the vessels entered neutral ports of refuge, where they remained. At due date the sellers tendered the shipping documents, in the one case a German bill of lading and an English policy of insurance, in the other a German bill of lading and a German policy of insurance. Both buyers and sellers were English

firms.

It was held that since the contracts of affreightment were dissolved by the war, and that so far as any prosecution of the voyage was concerned the bills of lading were no longer effective documents, that consequently the sellers had failed to fulfil performance by delivering to the buyers documents by virtue of which they might, if the goods were in existence, have obtained delivery. The sellers had tendered documents evidencing contracts which had been dissolved by the outbreak of war, and the further performance of which had become impossible, since it would have entailed entering into intercourse with the enemy.

It was stated in the course of the judgment that the effect of the Proclamation of September the 25th, 1915, was merely to enable owners of cargoes lying in a neutral port in an enemy ship to pay freight and other charges to the agent of the shipowner at that port to obtain possession of the cargo. The shippers in these cases could therefore have obtained possession of the cargoes without incurring the penalties of trading with the enemy.

Contracts of Agency.-A contract of agency already subsisting between persons who afterwards become enemies, and conferring a general authority on the agent to buy and sell and enter into other transactions on behalf of the principal will, like a partnership, be abrogated by war (r). But a limited agency, if created before the war, and if it does not involve any continuance of intercourse or the transmission of money or property during the war, might, it seems, be lawfully continued (s).

As was said by Lord Cozens-Hardy in Tingley v. Müller, [1917] 2 Ch. at p. 156, "It is true that most agencies, involving as they do continuous intercourse with an alien enemy, are revoked or at least suspended. But such considerations have no bearing on a special agency of this nature."

Contract of Charterparty.—In Bank Line, Ltd. v. Arthur Capel & Co. [1919] A. C. 435, Arthur Capel & Co. sought to recover damages for failure by the Bank Line, Ltd., to put at their disposal the s.s. Quito, which they had chartered for a period of twelve months. An option to cancel the agreement by the charterers should the vessel be requisitioned was given by the charterparty. Loss or damage arising from restraint of princes was excepted. Whilst the vessel was being prepared for service under the charterparty she was requisitioned by the Government. It was held that the application of the principle of frustration was

(r) U. S. v. Grossmayer, 9 Wall. 72; Scott, 582.

(s) Small v. Lumpkin, 28 Grat. 832: Scott, 584, n.

not excluded by the special terms of the charterparty and that the requisition destroyed the identity of the chartered service and made the charter as a matter of business a totally different thing. Consequently the appellants were entitled to treat the charterparty as at an end.

Contracts of Insurance.-In general, contracts of insurance, of whatever kind, if made before war, and the loss on which accrued before war, will merely be suspended in their legal effects by the outbreak of war between the States of the insurer and the assured, and can be sued on after the return of peace (t). But an insurance, even though made prior to the war, will not be deemed to avail against losses incurred by the British capture of enemy property (u). A contract of insurance entered into during the war with an alien enemy, or in relation to enemy property, will also be invalid (x), except when it relates to a trade carried on by licence of the Crown (y), or to property which, although situated in the enemy country, belongs to a British subject or corporation (z). A contract of insurance, even when made between British subjects, will be invalid if made in furtherance of trade with the enemy (a). Contracts of life and fire insurance, in so far as they involve periodical payments, which cannot strictly be made between persons divided by war, would probably be treated as annulled by war; although subject probably to a right on the part of the assured to recover the equitable value of the policy as from the time of abrogation (b). This difficulty might, however, be got over by a stipulation providing for the appointment in the country of the assured of an agent for the purpose merely of receiving-but not of transmitting (c)-the premiums during the war (d).

In The Palm Branch, 2 B. & C. P. C. 281 [1916], goods were shipped before the war on the Palm Branch, a British vessel, by neutral shippers to their own order, and under an option to be delivered at Hamburg to a German firm as agents for sale of the shippers. They were insured against war risks by German underwriters at Hamburg. Upon arrival at Liverpool the goods were seized as prize. At this moment the property in the goods had not passed from the shippers. After seizure and before the claim the shippers' agents in Germany claimed for a total loss and the German underwriters paid in full. Evans, P., held that the claim was put forward at the request and on behalf of the underwriters, who were therefore the real claimants to the goods or their proceeds and who were at the time of the claim the owners of the goods. That if the goods or their proceeds were released to the claimants, the latter would only hold them as trustees of and for the benefit of the underwriters. Accordingly the proceeds of the goods-they

(t) Janson v. Driefontein Consolidated Mines [1902] A. C. 484.

(u) Furtado v. Rogers, 3 B. & P. 191.

(x) Brandon v. Nesbitt, 6 T. R. 23. (y) Usparicha v. Noble, 13 East, 332; Scott, 639.

(z) This, although decided by Nigel G. M. Co. v. Hoade [1901] 2 K. B. 849, is questionable in principle, and might be reversed by a Court of

Appeal.

(a) Potts v. Bell, 8 T. R. 548.

(b) N. Y. Life Insurance Co. v. Statham, 93 U. S. 24; Scott, 617; cf. also Semmes v. Hartford Insurance Co., 13 Wall, 158.

(c) Which would render the stipulation illegal.

(d) N. Y. Life Insurance Co. v. Davis, 95 U. S. 425; Scott, 620, n.

had been sold as enemy property must be condemned. This judgment was upheld on appeal to the Privy Council, 3 B. & C. P. C. 241, without prejudice to the rights of any persons other than the underwriters, the order for condemnation to be set aside by consent, and the proceeds to remain in Court until further order, to give opportunity for neutral or British underwriters or re-insurers to put in claims if so advised (e).

Contracts of Partnership.-A contract of partnership already subsisting between persons who afterwards become enemies is, as we have seen, abrogated by war; on the ground that the disabilities and restrictions created by war are inconsistent with a due exercise of the rights or a proper discharge of the duties incident to partnership, and that the relation is one which from its very nature is incapable of suspension (f); although such abrogation is subject to a right of the alien partner on the termination of the war to recover the equitable value of his share at the time of dissolution, and some share of the profits derived from his interest in the capital employed (g).

Whatever doubts may have existed immediately after the outbreak of war were set at rest by the judgment of the Court of Appeal in Rex v. Kupfer [1915] 2 K. B. 321. Here the prisoner was partner in a firm consisting of himself and two brothers, which traded at Frankfort and in London. All the partners were naturalised British subjects. The prisoner carried on the business in London and the two brothers at Frankfort. After the Trading with the Enemy Proclamation, No. 2, of the 9th of September, 1914, the prisoner, acting on instructions from his Frankfort partners, made payments to neutrals who looked to them for payment, thereby augmenting the resources of individuals in Germany and diminishing those of individuals in Great Britain. It was held by the Court of Criminal Appeal that these indirect payments were payments "to or for the benefit of an enemy" within the meaning of the Proclamation.

It was assumed by the Court that the partnership came to an end by operation of law as soon as war was declared. "There can be no partnership," said Lord Reading, C.J., "between the enemies of this country and a subject of this country when war has once been proclaimed." The Frankfort partners, although British subjects, must be treated as alien enemies. Consequently the prisoner was guilty of

trading with the enemy.

British Prize Courts are, however, more lenient. It was held in The Anglo-Mexican, 3 B. & C. P. C. 24, that a neutral with a personal domicil in a neutral country, owning or being partner in a business in an enemy country, has a commercial domicil in that enemy country which imposes an enemy character on his property or interest in such business. But he ought to be allowed a reasonable interval in which to discontinue or dissociate himself from the business. If he has done this prior to the capture at sea of any goods belonging to the business, such goods, or his interest in them, will not be confiscable. If he has not done this prior to the capture, but the Court is of opinion that a reason

(e) See The Gothland, 8 B. & C. P. C. 293.

(e) See The Gothland, 2 B. & C. John. 438, cited in Esposito V.

Bowden, 27 L. J. Q. B. at 22. See also Hanger v. Abbott, 6 Wall. at 535.

(g) Supra, p. 94.

able interval had not already elapsed, the Court will take notice of what he has done since the capture, or will in a proper case let the question of compensation stand over to enable him to take further action. If he has already had such opportunity and has failed to take advantage of it, or has done some unequivocal act indicating an intention to continue or retain his interest, the goods or his interests therein will be condemned. And there is no exception in respect of goods shipped by him before the war and assigned to the firm in the enemy country, if he still retain his commercial domicil in the enemy country (h).

Interests in Commercial Corporations and Companies.-A corporation is itself a juristic person, and as such takes its character in war, as friendly or hostile, in general from its domicil, irrespective of the nationality of its directors or shareholders (i). Nevertheless war may produce important effects on the legal position of enemy persons having interests in such associations. In English and American law, indeed, this question does not appear to be covered by any direct authority (k). But on principle and analogy it would seem (1) that enemy directors would ipso facto vacate their seats, although retaining otherwise such rights as belong to enemy shareholders (1); (2) that enemy shareholders would retain their shares as property, although both their right to receive dividends and probably their obligation to pay calls would be suspended during the war (m), both reviving, however, on the return of peace; and (3) that enemy debenture holders would retain their security, whatever its form, although the right to receive interest thereon or such part of the principal as might accrue due during the war would be suspended (n), both reviving, however, on the restoration of peace (0).

During the war of 1914, in Great Britain and the United States the rights of enemy holders of these securities to payment of dividends was only suspended during the war. Still less was there any attempt to confiscate such securities. In Aramayo Francke Mines v. Public Trustee [1922] A. C. 406, it was held by the House of Lords that the company was liable out of the assets in its hands to pay to the Custodian the amounts of the dividends due to alien enemy shareholders. In Germany, by an Ordinance of the 30th of September, 1914, trans

(h) See also The Clan Grant, 1 B. & C. P. C. 272; The Eumæus, ibid. 605; The Maningtry, ibid. 497; The Dorfflinger (No. 4), 2 B. & C. P. C. 102; The Hypatia, ibid., 377.

(i) Janson v. Driefontein Consolidated Mines [1902] A. C. at 501. But see pp. 31-6, supra.

(k) But see Ex parte Boussmaker, 13 Ves. jun. 71; and Griswold v. Waddington, supra, although the differences between partnerships and corporations render the reasoning in the last case largely inapplicable. For a fuller examination of the problem of foreign investments in time of war.' see R. A. Chadwick, L. Q. R. xx. 167.

..

(1) See Daimler Case.

(m) Although the latter conclusion is doubtful and might be held to depend on the character of the business.

(n) Although if the interest were represented by coupons payable to bearer or the principal by any instrument negotiable by custom, the amount could be realised by assignment to neutrals: supra, p. 112.

(0) On the subject generally, see Westlake, ii. 49; Lindley, Company Law, 6th ed. i. 53; Latifi, 54; Phillipson, 100; Baty, International Law in S. Africa, 94; L. Q. R. xx. 167.

mission of funds to "Great Britain and Ireland or to British Colonies and foreign possessions" was prohibited, and all claims by persons in such areas relating to property were postponed until further notice. During the period of postponement no interest became payable.

In In re Fried. Krupp Actiengesellschaft [1917] 2 Ch. 188, it was found that a British firm-Wild & Co. was entitled to a sum of money under a contract with Messrs. Krupp, which it was agreed was governed by German law. It was further agreed that, by German law, "where a claim arises under a mercantile transaction between mercantile traders, interest at the rate of 5 per cent. per annum is payable from the date of maturity even in the absence of any agreement to that effect." Further, by the principles recognised throughout Germany, the outbreak of war did not in itself affect contractual relations then subsisting between Germans and persons residing or carrying on business in any country at war with Germany. It was accordingly held by Younger, J., that the Ordinance was not part of the general German law, by which the parties agreed to be bound, and that the Ordinance, with its marked bias in favour of German nationals as against British subjects, so far as it extinguished all German liability for conventional interest was not conformable to the usage of nations, and would not be recognised by the English Courts.

Real and Personal Property.-It was held in Brown v. United States, supra, p. 65, that enemy property could not be condemned unless Congress had authorised its seizure and condemnation. During the Civil War two Acts were passed-the 6th of August, 1861, and the 17th of July, 1862. The former authorised seizure of property acquired for the purpose of aiding the enemy; the latter authorised the seizure and confiscation of "the estate, property, money, stocks, credits and effects " of certain specified enemy persons who might thereafter be guilty of disloyalty and treason. In Conrad v. Waples, 96 U. S. 279, it was accordingly held that a conveyance of land by the parties, both being enemies before the Acts were passed, was valid.

In United States v. Quigley, 103 U. S. 595, it was held that transactions within the Confederate lines affecting loyal citizens outside were not all unlawful. This case was followed by Carson v. Dunham, 121 U. S. 421, when it was held that the fact that a mortgage was made in enemy territory to a loyal citizen of the United States did not necessarily imply unlawful intercourse between the parties contrary to the Proclamation of the 6th of August, 1861.

On sales of personal property, see Ware v. Jones, 61 Ala. 288; Montgomery v. Ú. S., 15 Wall. 395; and Briggs v. U. S., 143 U. S. 346. In the latter case a sale of cotton growing on a plantation within one of the enemy States took place between two citizens of the United States residing in loyal States. The Court recognised the rule laid down in Brown v. U. S. that war gives to the sovereign full right of confiscation; and that in Young v. U. S., 97 U. S. 39, when the Court said "all property within enemy territory is in law enemy property," and the pronouncement in Mrs. Alexander's Cotton, 2 Wall. 404, that this rigid rule" may now be regarded as substantially restricted to special cases dictated by the necessary operation of war and as excluding in general the seizure of the private property of pacific persons for the sake of gain.