Held, further, as regards the German contract: (1) that, in the absence of evidence to the contrary, the presumption was that the law of Germany was the same as the law of England; (2) that, assuming these contracts to be valid by the law of Germany, the question whether they were void as against public policy was to be determined by the law of England.

It was argued in the last two cases that the contracts were in German, made in Germany, to be performed in Germany, and that if about to be enforced in this country they ought to be construed and interpreted according to German law. Further, that even although such construction might authorise acts injurious to the interests of the United Kingdom so that such acts were contrary to public policy, yet they ought to be enforced here according to German law, and could not be held to be illegal. In rejecting this contention, both Lord Atkinson and Lord Parker quoted with approval the following passage from Westlake's Private International Law, § 215, where a contract conflicts with what are deemed in England to be essential to public or moral interests, it cannot be enforced here notwithstanding that it may have been valid by its proper law."

In Elders & Fyffes v. Hamburg-Amerikanische Paketfahrt Actiengesellschaft, 34 T. L. R. 275, the plaintiff company remained liable under agreements creating a continuing course of business to perform certain acts including payment of money for the benefit of the defendants for a period of thirty years.

It was held by the Court of Appeal that the contracts were intended to operate over a long period of years, and that although the bulk of the shares of the English company was held by Americans it was an English company, and that the acts to be performed involved intercourse with the enemy. Consequently the contracts were dissolved on the outbreak of war.

The principles enunciated in these cases were applied by the House of Lords in Orconera Iron Ore Co., Ltd. v. Krupp Actien-Gesellschaft, 120 L. T. R. 386 (1919). The facts were very similar. This was a contract for the supply of iron ore to the defendants, the appellants, subject to a suspension of delivery in the event of war and to the performance of various acts during such suspension. Whether the effect of the outbreak of war was to dissolve this contract, said Lord Birkenhead, or merely to suspend its operation, was, prior to Rio Tinto Co. v. Bieber & Co., fairly open to argument. The law, as I understand it, says that in the facts that have arisen, and for the reasons, amongst others, given by Lord Dunedin, this contract must be dissolved.

In Zinc Corporation, Ltd. v. Hirsch [1916] 1 K. B. 541, where it was a term of the contract that performance should be suspended in the event of strikes, stoppage, acts of God, force majeure, or any cause beyond the control of either party it was held that, assuming that the war was such a cause of suspension, it was only a suspension of deliveries

of the goods and not of the whole contract. But since the continued existence of the contract would involve commercial intercourse with the enemy, it was dissolved by the outbreak of the war.

Under the agreement the plaintiffs contracted not to sell to any other than the defendants. "To carry out such an agreement," said Swinfen Eady, L.J., “ during the war and to withdraw goods from commerce and preserve them for the enemy after the war is little removed from actually trading with the enemy.'

In Veithardt & Hall, Ltd. v. Rylands Bros., Ltd., 116 L. T. R. 706, the contract was "subject to the general conditions of sale of the Continental works as to open navigation, strikes, lock-outs and other unforeseen hindrances, preventing execution in due time." Under the conditions of sale, "in case of force majeure, as strikes or combinations of workmen or accidents, war or mobilisation," delivery might be partially or wholly suspended.

It was held that the existing war was not among the " unforeseen hindrances" in the contemplation of the parties, but that it was an event rendering the execution of the contract illegal, as it necessitated trading with the enemy.

Case.]

(b) As Incapable of Suspension.

GRISWOLD v. WADDINGTON.

[16 Johnson's Rep. 438; Scott, 604 (1818).]

PRIOR to the outbreak of war between Great Britain and the United States, in 1812, a commercial partnership had subsisted between Joshua Waddington, an American citizen residing in New York, and Henry Waddington, a British subject residing in London. During the war certain business transactions occurred between Joshua Waddington and N. L. & G. Griswold. After the war proceedings were taken by the latter to recover a balance of account alleged to be due to them in respect of these transactions, for which it was sought to make Henry Waddington, the English partner, liable. In the Court below judgment passed for the defendant; and on appeal to the Court of Errors, this judgment was affirmed on the ground that the partnership between Joshua and Henry Waddington had been dissolved by war.

Judgment.] Kent, Ch., pointed out that the declaration of war of itself worked a dissolution of all commercial partnerships existing at the time between British subjects and American

citizens; and further that by dealing with either party no third person could acquire a legal right against the other, for the reason that one alien enemy could not, in that capacity, make a private contract binding upon the other. The learned judge stated, in effect, that such a conclusion appeared to be an inevitable result of the new relations created by war, and a necessary consequence of the rule which prohibited trade or communication with an enemy. The state of war, in fact, created disabilities, restrictions, and duties, which were altogether inconsistent with the continuance of such a relation. To allow an alien enemy to bind a hostile partner by his contracts, when the latter could exercise. no control over them, would be altogether unjust, and when the business of the partnership was thus put an end to, the partnership itself ceased. Having regard, more particularly, to the nature and objects of commercial partnerships, it was contrary to all the rules by which they were governed, that they should continue after the parties had been interdicted from all communication with each other, and placed in a state of absolute hostility to each other, for there could no longer be that unity of interest or that lawful common aim which was essential to partnership. The commerce carried on by one partner must, in a maritime war, necessarily contribute to the resources and efforts of his country; and, in such circumstances, to allow the other partner to draw a revenue from operations subversive of his own country's interests, would result in a complete confounding of the obligations arising from the law of partnership and the law of war. Nor could the partnership be abridged during the war to business that was harmless, without destroying it. Equally little could it be deemed to continue in a quiescent state during the war, on the terms of each partner not sharing in the profits made by the carrying on of a commerce that was hostile to his country; for that might mean that one might be called on to share in losses without sharing in profits, which would be incompatible with partnership. Each partner was, indeed, entitled to contract and bind the firm; but, as against this, each was also entitled to check and control such action on the part of the other. But if a partnership were allowed to continue in war as between hostile associates this control would be gone. Moreover, each partner

being disabled by the war from discharging his duty, or a part of his duty, it would seem that such a disability, whether under the civil or the English law, had the effect of dissolving the relation. As regards notice in the present case the declaration of war was in itself the most authentic and monitory notice, and no other was required. The partnership, moreover, having been once dissolved by the war, could no longer be the foundation of any right of action, except as to matters arising before the war.

HUGH STEVENSON & SONS, LTD. v. AKTIENGESELLSCHAFT FUR CARTONNAGEN-INDUSTRIE.

[ [1917] 1 K. B. 852; [1918] A. C. 239.]

Case.] THESE two companies carried on the business in partnership in England of a clamp factory. After the outbreak of the war the appellants continued to carry on the business and to use the machinery for the manufacture of clamps. On 21st of June, 1915, the appellants, under the Legal Proceedings against Enemies Act, 1915 (x), asked for a declaration that they should account for the machinery at the price at which it stood in the books of the partnership on 4th of August, 1914, or, alternatively, at its value at that date. Mr. Justice Atkin held in effect that the partnership was dissolved on 4th of August, 1914; that the respondents were entitled to the value of their share in the property of the partnership on that date but not entitled to any of the profits or interest in the capital of the partnership since that date-in other words, that the English company were entitled to use the machinery for the purposes of the business without making any allowance to the German partner for the use of his interest therein.

Upon appeal the majority of the Court of Appeal held that the right to some allowance for the use by the appellants of the German company's interest in the machinery should not be excluded altogether.

Judgment.] In his opinion, said Lord Finlay, L.C., the decision of the majority of the Court of Appeal was right. "It

(x) 5 Geo. 5, c. 36.

is not the law of this country that the property of enemy subjects is confiscated. Until the restoration of peace the enemy can, of course, make no claim to have it delivered up to him, but when peace is restored he is considered entitled to his property with any fruits which it may have borne in the meantime. The question to be determined in the present case does not depend on contract but on the rights of property which both partners have in the assets of the firm. The enemy partner was entitled to the value of his share in the machinery. If that amount had been ascertained on August 4th, 1914, it would have been retained in custody, and if it had been invested, as in the ordinary course it would have been, the enemy partner would on the conclusion of peace have been entitled to the principal with any interest or dividends which had accrued in the meantime. What took place here was that the English partner continued the business, using the machinery to earn profits. The German partner is, of course, not entitled to any share of the profits attributable to the skill or industry of the English partner, but some portion of the profits may be attributable to the machinery used, and the enemy partner would be entitled to some allowance in respect of his interest therein. Or to put the matter in another way, some allowance may be made in lieu of interest on its value in respect of the use by the English partner of the German share of the machinery."

The rule of international law upon the question of interest or debts does not appear to have formed the subject of any express decision in England, but it was difficult to see on what principle the interest is to be forfeited if private property is to be respected. The question here, however, was not one of contract but of property, and what was equitable as between two partners in respect of the property of the firm. "If," said his Lordship, "the English partner uses the machinery which was in part the property of the enemy partner, why should not he in justice make some allowance in respect of this use? The price representing the value of interest of the machinery has not been paid and I do not think that it would be in accordance with law to allow a declaration to stand which would bar all right to share in any profits which may be found to be attributable to the use of the machinery or some allowance by way of interest on the value of the German partner's share in it."