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and the payment of a capital sum. The two earlier English cases, Wolff v. Oxholm1 and Du Belloix v. Lord Waterparka, are not of much help, although in the latter case there are some remarks by Abbott C.J. (as he then was) which, though not necessary to the decision, are worth quoting: 'But there is another objection to the plaintiff's recovering interest on the debt, for during the greatest part of that time he was an alien enemy, and could not have recovered even the principal in this country, and at all events during that portion of the time the interest could not have run, and it would even have been illegal to pay the bill whilst the plaintiff was an alien enemy.'

It should be noted that where there has been before the outbreak of war a breach of contract which is adequate to effect a discharge, no question arises of abrogation or discharge of contract as the result of war. The contract is already discharged by breach, and the question for us is the fate of the right of action which arose upon the occurrence of the breach.

(6) We now come to the more difficult case; viz. where no right of action has accrued, that is where there had been at the date of the outbreak of war no breach of contract by either party adequate to effect a discharge. There is considerable obscurity on this point. Theoretically one of two things might happen: (1) the performance of the contract might be suspended until the declaration of peace: (2) performance or further performance of the contract might be completely abrogated as from the outbreak of war. Such was the general view prevailing amongst lawyers in 1914, but the experience of the past five years shows that, however true it may be in theory that there are some contracts crossing the line of war which can survive the outbreak of war, performance being meantime suspended, the courts have not succeeded in finding many of that character. Indeed, as we shall see, even where the parties by their contracts have aimed at producing this very effect, the courts have been astute to find reasons for its impracticability and illegality. The suspension theory rests mainly upon an obiter dictum by Lord Halsbury in Janson's casel, which is explained by Lord Dunedin in the recent case about to be considered. Lord Halsbury was assuredly referring to contracts upon which a right of action had already accrued before the outbreak of war, and which we have referred to above.

1 (1817) 6 M. and S. 92.

2 (1822) 1 Dow. and Ry. 16, 19. 3 On the use of the word 'suspend' in this connexion, see The Effect of War on Contract by F. D. Mackinnon, K.C., Clarendon Press (1917), pp. 17, 18.

We shall however be safer in assuming that discharge is the rule, although we shall find that there are one or two classes of contract where this is not so3. Probably these exceptions will be found to be cases as much of property as of contract, if not more, and private enemy property on land is not confiscable by the law of England according to modern usage.

Let us now turn to the abrogation theory and endeavour to derive it and then to state its modern application. In the first place, it seems clear that the rules against trading or other intercourse with the enemy, although ample justification has now been discovered for them as self-contained and selfsupporting principles of public policy, are largely the consequence of the procedural disability of the alien enemyo. Another source is indicated by Dr Baty who concludes a review of the authorities by stating that “the rule as to the invalidity of contracts with the enemy, and the suspension or dissolution made prior to the event of war, is derived mainly, if not entirely, from the danger and impossibility of permitting intimate intercourse between the subjects of enemy States; that it is not derived from any abstract theory of individual hostility, nor (as mistakenly supposed in recent cases) on any imagined benefits of suppressing the enemy's trade, even when conducted with ourselves.

However that may have been, we shall find that modern views of war have placed the rules regulating intercourse with the enemy on an entirely different footing. The landmarks in

1 [1902] A. C. at p. 493.
2 Ertel Bieber & Co. v. Rio Tinto Co. (1918] A. C. at p. 269.

3 See, for instance (1918] A. C. at p. 269, where Lord Dunedin speaks of 'the concomitants of rights of property.'

4 (1799) 1 C. Rob. at p. 201.
s L. Q. R. XXXI. at p. 49 (January 1915).

the journey are said by Lord Dunedin to be The Hoop (1799), Furtado v. Rogers (1802), and Esposito v. Bowden (1857), and all these cases are reviewed by him in his judgment in the case about to be discussed4. 'From these cases,' says Lord Dunedin at p. 274, 'I draw the conclusion that upon the ground of public policy the continued existence of contractual relation between subjects and alien enemies or persons voluntarily residing in the enemy country which (1) gives opportunities for the conveyance of information which may hurt the conduct of the war, or (2) may tend to increase the resources of the enemy or cripple the resources of the King's subjects, is obnoxious and prohibited by our law.' Let us apply this statement to some actual transactions. By contract made prior to the war a ‘British resident' promises an 'enemy resident' to deliver a consignment of goods to him on sale upon a date which falls during the currency of the war. Such a contract is ipso facto dissolved by the outbreak of war. But suppose that the date of delivery of the goods is such that the war may be over before the time comes for the natural performance of the contract. Suppose again that the parties to the contract in their anxiety to preserve the contract from the dissolving effect of war have introduced into it a clause whereby all performance shall be suspended during war and only resumed when the war is over. It is this last point which has been the subject of so much litigation during the recent war. There were in existence upon the outbreak of war a number of long term contracts for the delivery of ores of various kinds to German firms in which the parties had been astute to suspend the delivery of instalments in the event of war which presumably meant or included war between the British and German Empires. The group of cases in which this point has been recently considered 5 has now been reviewed in the 11 C. Rob. 196. See Chapter II at p. 32. 2 3 Bos. and P. 191.

37 E. and B. 763. 4 Ertel Bieber & Co. v. Rio Tinto Co. [1918] A. C. at p. 273.

5 Zinc Corporation v. Hirsch (1916] 1 K. B. 541 (C. A.); Distington Hematite Iron Co. v. Possehl & Co. [1916) 1 K. B. 811; Clapham Steamship Co.'s case (1917] 2 K. B. 639; Naylor Benzon & Co. v. Krainische Industrie Gesellschaft (1918] 1 K. B. 331; (1918] 2 K. B. 486 (C. A.).


House of Lords in the course of three of the most important of them?, and it is now possible to summarize the various grounds on which the law will hold such a contract dissolved, and not merely suspended. (The initial difficulty of bringing such a matter before the Courts at all during war is obviated by the Legal Proceedings against Enemies Act, 1915, enabling a British subject to obtain a declaration upon such a contract.) The principal grounds are (i) that 'a state of war between this kingdom and another country abrogates and puts an end to all executory contracts which for their further performance require, as it is often phrased, commercial intercourse between the one contracting party, subject of the King, and the other contracting party, an alien enemy, or any one voluntarily residing in the enemy country?' But 'the word “intercourse” is sufficient without the epithet “commercial.” (ii) That even if the suspensory clauses are adequate to suspend deliveries, there are other obligations in the contracts not covered by the suspension, for instance, arbitration, declaration of quantities and character, which must or might involve intercourse during the war. (iii) That even if the interpretation of the suspensory clauses is such as to suspend the entire operation of the contract during the war, the clauses would be contrary to public policy on the ground that they cripple the trading resources and operations of this country and enhance those of the enemy by ensuring to him a supply of raw materials upon the conclusion of peace. (iv) That, while deliveries during the war are illegal on ground (i) above mentioned, to hold that the British subject remained liable to make the deliveries, if any, which, according to the contract, fall to be made after the war is over' is to impose upon the parties a new contract (because during the war the quantity to be delivered must be uncertain) and would be contrary to the decisions of the House of Lords in Horlock v. Beals and Metropolitan Water Board v. Dick, Kerr & Co.

1 Ertel Bieber & Co. v. Rio Tinto Co., and two other cases. [1918] A.C. 260. 2 Per Lord Dunedin (1918] A. C. at p. 267. 8 [1916] 1 A. C. 486.

4 (1918] A. C. 119.

The argument derived from the effect upon the resources of both parties and through them of their respective countries referred to in (iii) is not a mere echo of the Paris Resolutions of 19161, though possibly deriving some moral support from them. The effect of an immediate certainty of a future event is, or may well be, itself immediate and not merely future. 'It increases the resources of the enemy, for if the enemy knows that he is contractually sure of getting the supply as soon as war is over, that not only allows him to denude himself of present stocks, but it represents a present value which may be realized by mean of assignation to neutral countries?' Moreover, it cripples British resources by tying up quantities of raw materials, either indirectly as might be the effect of suspension, or directly in pursuance of a covenant not to sell to any one else such as existed in the Zinc Corporation Limited v. Hirsch contract. Lord Alvanley points out in Furtado v. Rogers3 that if the enemy is to receive his insurance indemnity after the war, he ‘is very little injured by captures for which he is sure at some period or other to be repaid by the underwriter.

This doctrine, however, of the present value to the enemy of some post-war benefit is both specious and dangerous. It is easy to argue as in the passages above quoted that the certainty of a post-war benefit may strengthen the enemy's immediate resistance, but does not the rule that private enemy property on land, e.g. debts, rights of action already accrued, etc., is not confiscable have precisely the same effect? If everything which might benefit the enemy during or after the war is to be illegal and forbidden on grounds of public policy, then might it not follow that private enemy property on land is confiscable, that rights of action accrued to enemies on the outbreak of war are destroyed and not suspended, and that the preamble of the Trading with the Enemy Amendment Act, 1914, ‘for preserving' by means of a Custodian with a view

i Cd. 8271 of 1916. 2 Per Lord Dunedin (1918] A. C. at p. 275 3 Supra, cited [1918] A. C. at p. 274.

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