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was manifestly to the benefit of this country that the landlord should receive it, and the Trading with the Enemy Proclamation of 9th September, 1914 (probably declaratory in this respect) authorized its receipt. The effect of war upon the landlord's covenants did not arise.

(ii) Contracts for Sale of Land. In Tingley v. Müller?, the Court of Appeal held that a power of attorney for the sale of leaseholds (expressed to be irrevocable for twelve months) given by a person who subsequently became an enemy resident' by crossing the line of war into enemy territory, remained valid notwithstanding and was not thereby avoided; further that the agreement for the sale of the leaseholds which was entered into by the attorney after the principal had become an enemy resident'was valid, as it involved no intercourse with the enemy, so that the sale could be carried out, the proceeds being handed over to the Custodian. For the purpose of our argument, the date of becoming an enemy across the line of war in this case is equivalent to the date of the outbreak of war.

In the foregoing cases the obligation, so far from being abrogated, was not even treated as being suspended, and indeed any such decision would have been manifestly to the detriment of the British subject. We have yet to find and examine cases of suspension.

(i) In Robson v. Premier Oil and Pipe Line Co.2 the Court of Appeal refused to allow a proxy on behalf of an enemy corporation to vote in respect of shares held by it in an election of directors of an English company, and regarded the right of voting as in suspense during the war, but they refrained from saying whether the same principle would apply to `intercourse which could not possibly tend to detriment to this country or to advantage to the enemy.'

The fate of the enemy resident' shareholder's contract of membership with an English company3 is not yet clear, and it is hard to say whether it revives upon the termination of the war, or whether, following the partnership analogy, it is

1 [1917] 2 Ch. 144 (C. A.). See also remarks in Chapter III, p. 48. 2 (1915] 2 Ch. 124 (C. A.).

• See Chapter VI, pp. 125–30.

destroyed and he merely receives the value of his holding on the outbreak of war together with an allowance in respect of his share for the use by the company of its assets during the war as in the case of the enemy partner. It is clear at any rate that during the war the enemy resident' shareholder's rights to vote, to receive dividends, and to transfer his share, are in abeyance.

(ii) The case of a life insurance policy where the 'life' becomes an enemy resident'is considered later in Chapter VII.

Partnership is an instance of abrogation, although as we shall see when we examine it in detail in Chapter VII this is not equivalent to saying that the contract is destroyed, because there are certain incidental rights of property which are preserved. The partnership relation, however, ceases, and it would require a new agreement (express or implied) after the war to reconstitute it.

In cases of suspension of the obligation to perform (if any such there be) or in cases such as partnership where the contractual relation is destroyed but a proprietary right remains, have the Statutes of Limitation any application? It is submitted, No. They are statutes for the limitation of actions or rights of action, not rights of performance, and they can have no effect or bearing upon the suspension of a contract at all. That would amount to a confusion of the primary right to performance created by the contract and the secondary right of action which arises from a breach.

(2) We now come to contracts which it is attempted to make during war.

The general rule is that all contracts which ‘British residents' and 'enemy residents' separated by the line of war may attempt to make during war are illegal, void, and can never be enforced?. This is the rule of non-intercourse and applies to all transactions, by way of trading or otherwise. Lord Stowell's judgment in the case of The Hoop2 has already been quoted. Further illustration is given by Willison v. Patteson? where it is positively stated that ‘No contract can be enforced in a Court of British judicature which is made during the war and which is made by an alien enemy.' In that case a Frenchman resident in France, drew three bills of exchange upon the defendant a British merchant in London which, when accepted, he endorsed to the plaintiff, a British merchant resident in France, who now sued after peace was declared, the drawing, accepting and endorsing having all taken place while this country was at war with France; it was held that the plaintiff could not recover, and he himself was regarded as having been an alien enemy. That the rule of non-intercourse is not confined to cases of commercial transactions is clear from the judgment of the Court of Appeal in Robson v. Premier Oil and Pipe Line Company: “The prohibition of intercourse with alien enemies rests upon public policy, and we can see no ground either on principle or authority for holding that a transaction between an alien enemy and a British subject which might result in detriment to this country or advantage

i Similarly contracts collateral to and in furtherance of illegal contracts are themselves illegal. Potts v. Bell (1800) 8 T. R. 548.

2 Chapter II, p. 32.

to the enemy is permissible because it cannot be brought within in the definition of a commercial transaction.'

In this chapter we have been dealing with contracts between parties separated by the line of war. It will however have been noted that the prohibition of intercourse with the enemy has a geographical rather than a personal meaning, and thus we do not find it applied to enemy subjects in our midst who duly registered under the Aliens Restriction Act, 1914, and otherwise complied with the regulations of the Executive. There seems no reason to doubt that the contractual capacity

1 (1817) 7 Taunt. 439, 450. Antoine v. Morshead (1815) 6 Taunt. 237, must, it is submitted, be regarded as an exceptional case, in which the decision was largely due to the fact that the object of the transaction, namely to succour the needs of British prisoners of war in France, made a strong appeal on grounds of humanity. There a bill of exchange was drawn during war in France by one British prisoner in favour of another upon a British subject in England and then endorsed by the payee to a French subject in France, who on the declaration of peace obtained judgment against the acceptor in an English court.

2 (1915] 2 Ch. at p. 136; adopted by Lord Dunedin (1918] A. C. at p. 268. of an enemy subject so situated is the same as that of a British subject resident in this country, whether the contract was made before or during the war. At any rate, contracts of the following nature made during the war by enemy subjects in these circumstances have been upheld-loan of money and sale of goods?, power of attorney for sale of leaseholds followed by an agreement for sale by the attorney?; and there appears to be no reason why the same rule should not prevail generally. Nor does temporary3 or lasting 4 internment of the enemy affect the validity of the contract, at least where the internment is normal and is not the result of hostile attitude or some overt hostile act5; and it would seem to follow that a contract otherwise valid could be made during internment.


OR BETWEEN NEUTRAL AND ENEMY RESIDENTS. These are from their nature not likely to come before our Courts in their contractual aspects, though our Prize Court may have to do with them either in case (B) as constituting trading with the enemy, the prohibition of which each ally will enforce by condemnation not only upon its own but its Allies' subjects as being injurious to the common cause, or in case (C) as contraventions of the law relating to Contraband, Blockade, Unneutral Service, or of analogous measures for crippling the resources of the enemy such as the British Retaliatory Orders in Council of March 1915 and February 1917. Thus in The Panariellos 6 the President of the Prize Court (Sir Samuel Evans), in condemning the property of a French company which (though in good faith) had had commercial intercourse immediately after the outbreak of war in

1 Schaffenius v. Goldberg (1916) 1 K. B. 284 (C. A.). 2 Tingley v. Müller (supra).

3 Nordman v. Rayner and Sturges (1916) 33 T. L. R. 87—a case of a contract of agency made before the war.

4 Schaffenius v. Goldberg, supra.
6 See Chapter III, at p. 47.
6 (1915) 31 T. L. R. 326; affirmed (1916) 32 T. L. R. 459.


connexion with a pre-war contract of sale of the cargo seized
as prize, stated the rule to be that where the
‘illegal intercourse is proved between allied citizens and the enemy,
their property engaged in such intercourse, whether ship or cargo,
is subject to capture by any allied belligerent, and is subject to
condemnation in that belligerent's own Prize Courts.'

Again, in an action brought by a Belgian firm carrying on business in Antwerp and London upon a pre-war contract with a German firm carrying on business at Hamburg and, before the war, in London, Bray J. held that there was no breach of the contract, as it became illegal and was dissolved by the outbreak of war. It was just as illegal for the subjects of an ally to have intercourse with the enemy as it was for British subjects.

With regard to dealings between ‘Neutral and Enemy Residents,' the law administered by the Prize Court allows the neutral whom the outbreak of war finds with a commercial domicile in the enemy country, a locus poenitentiae in which to dissociate himself from the enemy, and the matter was fully discussed by the Judicial Committee in the present war in the case of The Anglo-Mexican. a. 7m.

D. CONTRACTS BETWEEN BRITISH RESIDENTS (or persons resident in British, Allied or Neutral territory).

There was a widespread impression amongst laymen upon the outbreak of the recent war that any person who was thereby disabled from, or inconvenienced in, carrying out a contract was at liberty to treat it as dissolved by the war; that therefore you need not pay for rooms or a house you had engaged for your summer holiday; that you could dismiss employees without notice; or that you were not bound to complete a contract to buy land or shares. The error of such views was quickly demonstrated by the Moratorium Proclamations and

1 Kreglinger & Co. v. Cohen (1915) 31 T. L. R. 592. 2 (1918] A. C. 422.

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