(3) In a war in which the British Empire is neutral different questions arise. Our municipal law does not treat blockaderunning or the carriage of contraband as illegal1, and our Government recognizes the right of belligerents to check these practices by the infliction of the customary penalties. When therefore a contract for such a purpose is entered into either before or during the war, then at any rate where the party against whom it is sought to enforce it knew or ought to have known of the peculiar nature of the venture2, the law will enforce it3. But where the contract is made, for instance, before and not in contemplation of war, or before and not in contemplation of the blockade of the agreed destination, it is believed that the contract must be treated as discharged on the ground that a totally new state of affairs has arisen, and the contract has ceased to involve an ordinary commercial adventure.

Some countenance is lent to this view by the case of The Teutonia, although the ship was Prussian and Prussia became a belligerent, so that it is not a simple case of a neutral ship bound for a blockaded port. There an English merchant had shipped goods at a South American port on board of a Prussian vessel to be discharged at any port in Great Britain or on the continent between Havre and Hamburg, and the cargo-owner had ordered the goods to be delivered at Dunkirk. The ship arrived off Dunkirk on the 16th of July 1870 and lay to about 14 miles away, the master having heard rumours of war between Prussia and France. Presently a regular pilot, in official uniform, came aboard and told the master that war had been declared two days ago. Accordingly the master took his ship over to the Downs, and on the 19th took her into Dover. As a matter of fact, a state of war did not begin until the 19th, so that the master could have entered Dunkirk on the 16th without committing what for him would be the offence of trading with the enemy. The master then demanded freight before releasing his cargo at Dover. The Privy Council 1 Kenny, Outlines of Criminal Law (9th ed.) p. 319. 2 See Palace Shipping Co. v. Caine [1907] A. C. 386. 3 See Carver's Carriage by Sea (6th ed.) ss. 245-6. 4 (1872) L. R. 4 P. C. 171.

affirming the decision of the Court of Admiralty (Sir Robert Phillimore) held that the master was justified in making further inquiries before entering Dunkirk and that the English cargo-owner could not complain of his taking reasonable and prudent steps for the preservation of his ship; also, that since the charter-party had originally contemplated delivery at Dover as possible and had named a freight for that port, the master was entitled to his freight before releasing the cargo.

Geipel v. Smith1 also shows that the outbreak of war by converting what was purely a commercial venture into an attempt to run a blockade discharges both shipowner and charterer from performance. The fact that, as the Court held, a blockade came within the 'restraint of princes' clause in the charter-party would have been enough to protect the shipowner from an action for damages for refusing to attempt to run the blockade or even send his ship to the loading port, but for the reasons discussed in Chapter V upon supervening impossibility of performance the drastic change in the character of the voyage produced by the blockade dissolved the contract entirely.

The effect of the decisions upon a seaman's contract of service about to be discussed also points in the same direction.

(4) If we may deal here with a contract which is not affreightment but closely connected with it, what are the effects of the outbreak of war upon the seaman's contract of service? It is clear from O'Neill v. Armstrong, Mitchell & Co.2 that the outbreak of war may convert an ordinary voyage into an entirely different one by exposing the seaman to risks greater than, and different from, those contracted for, and in addition, if the seaman's country is neutral, to the risk of prosecution under a Foreign Enlistment Act, and thus may justify the seaman in treating his contract as at an end. Further, at any rate if the seaman is in the employment of one of the belligerent 1 (1872) L. R. 7 Q. B. 404.

2 [1895] 2 Q. B. 418. See also Palace Shipping Co. v. Caine [1907] A. C. 386, where the transaction was regarded by Lord Loreburn L.C. as 'designed to force into a hazardous enterprise, partaking of the risks of war, seamen who had agreed to serve on a peaceful voyage.'

governments, as O'Neill was in effect employed by the Japanese Government, he can claim wages for the whole voyage as if he had completed it, on the ground that it was his employer's fault that the service was incomplete. Otherwise, he ceases to be entitled to his wages as is clear from Horlock v. Beal1 discussed in Chapter V. It might have been thought that on the ground of public policy the principle of O'Neill v. Armstrong, so far as the discharge of the contract is concerned, would not have been applied to the contracts of British seamen on board a British ship at a time when the British Empire goes to war, but in Liston v. Owners of Steamship Carpathian2 certain members of the crew (apparently British subjects but this is not clear) were held to have been justified in treating their contracts as at an end and in demanding increased wages on the ground that what began as an ordinary commercial voyage had lost that character owing to the entirely unforeseen risks of war such as capture, mines, etc. A number of the earlier cases upon the effect of hostile detention on the seaman's contract are considered in Horlock v. Beal3 from which case it is clear that according to the modern view hostile detention of ship and crew or either of them must almost invariably dissolve the contract with no further right or liability to the payment of wages after the date of the detention.

AGENCY.

(1) As between the principal and the agent one of whom becomes upon the outbreak of war an 'enemy resident,' the contract of agency is dissolved while the proprietary rights are preserved, and no fresh agency can be created during the

war.

(2) As regards third parties, the authority of the agent in this country representing a principal who is an enemy resident is determined ipso facto by war as by the principal's death or insanity, since the outbreak of war renders the principal 1 [1916] 1 A. C. 486. 3 Supra.

2 [1915] 2 K. B. 43.

4 Hugh Stevenson & Sons v. A.-G. für Cartonnagen Industrie [1918] A. C. 239.

unable to sue or contract or have any legal transactions with persons in this country. 'It was obvious that the agent would have no greater right than his principal who, being an alien enemy, could not sue1.'

Therefore, it is submitted that, quite apart from any criminality as amounting to 'trading with the enemy,' any payment to or dealing with the agent is nugatory and does not bind the principal.

As to the legality of such payments or dealings, the medium of an agent will not cure what is in fact a transaction with the enemy, and most of the clauses of the Trading with the Enemy Proclamations use some such words as 'to or for the benefit of' or 'on behalf of an enemy,' which are aimed at any such attempts. But the mere fact that a plaintiff will after the war come under a liability to remit a part of the sum sued for to an alien enemy whose security is thus improved, does not prevent him from recovering as between himself and the defendant2.

Further, it is clear that an agent in this country of an enemy cannot sue under a power of attorney or similar authority, for he can be in no better position than his principal3.

We must therefore reject the lax American view expressed in Kershaw v. Kelsey1, that payments may be made to the agent here of a principal in enemy country, 'nor was it any objection that the agent might remit the money to the enemy for in that case the offence would be his.'

But a power of attorney for the sale of leaseholds, expressed to be irrevocable for twelve months, was not revoked by the principal subsequently crossing the line of war and becoming an 'enemy resident' (he was always a German subject), and the British attorney could legally carry out an agreement of sale made after the principal acquired enemy character; and receive the purchase-money, holding it upon the instructions

1 Maxwell v. Grunhut (1914) 31 T. L. R. at p. 80-by the full Court of Appeal.

2 Schmitz v. Van der Veen & Co. (1915) 31 T. L. R. 214.

3 Brandon v. Nesbitt (1794) 6 T. R. 23; Maxwell v. Grunhut, supra.

4 (1868) 100 Mass. 561; Pitt Cobbett's Leading Cases and Opinions on International Law (3rd ed.), Vol. II. p. 78.

of the Public Trustee whom he had duly notified1. The decision of the Court of Appeal appears to have been influenced by the facts that no further intercourse between the agent and his principal was necessary, and that the power of attorney related to land and so was on a special footing amounting for many purposes to an equitable conveyance, and notably by Lord Parker's remarks in Daimler Co. v. Continental Tyre and Rubber Co.2 (concurred in by Lord Mersey, Lord Kinnear, and Lord Sumner) upon the theme that

'the prohibition against doing anything for the benefit of an enemy contemplates his benefit during the war and not the possible benefit he may gain when peace comes.'

The dissenting judgment of Scrutton L.J. in Tingley v. Müller and his comments upon Lord Parker's remarks at p. 177 should be noted. Lord Parker explained their application at a later date3.

A difficult question arises in distinguishing between mere agency on behalf of an 'enemy resident' and a 'branch' of an enemy business within the meaning of section 6 of the Trading with the Enemy Proclamation of 9th September, 1914. Dealings with an agent representing a principal who is an 'enemy resident' are, it has been submitted, both nugatory and criminal. But dealings with a branch of an enemy concern in British, allied, or neutral territory, other than neutral territory in Europe, are permitted by the Proclamation of 9th September, 1914. What then is a 'branch'? What are 'transactions by or with it'?

Can we use the test applied for the purpose of O. 9, r. 8 of the Rules of the Supreme Court in the service of process on foreign corporations? They can be served in England only when they are conducting their business or a material part of

1 [1917] 2 Ch. 144 (C. A.). See also Williams v. Paine (1897) 169 U. S. 55. 2 [1916] 2 A. C. at p. 347. 3 [1918] A. C. at p. 284.

4 See as to Insurance s. 5 of Proclamation of 8th October, 1914, and as to Banking s. I of that of 7th January, 1915.

And other than China, Siam, Persia, or Morocco (Proclamation of 25th June, 1915) or Liberia and Portuguese East Africa( Proclamation of 10th November, 1915).