TRADING WITH ENEMIES. sacred and shall be enforced by Courts of justice. Therefore, you have this paramount public policy to consider-that you are not lightly to interfere with this freedom of contract" (a). We now proceed to the several heads of the subject. 257 A. First, as to matters concerning the commonwealth in its A. Public relations with foreign powers. policy as touching the State. "On the principles of the English law it is not competent to external any [domiciled British] (b) subject to enter into a contract to do relations of anything which may be detrimental to the interests of his own country" (c). An agreement may be void for reasons of this kind either when it is for the benefit of an enemy, or when the enforcement of it would be an affront to a friendly state. with enemy. As to the first and more important branch of this rule: "It is Trading now fully established that, the presumed object of war being as much to cripple the enemy's commerce as to capture his property, a declaration of war imports a prohibition of commercial intercourse and correspondence with the inhabitants of the enemy's country, and that such intercourse, except with the licence of the Crown, is illegal" (d). The case of Potts v. Bell (e), decided by the Exchequer Potts v. Chamber in 1800, is the leading authority on this subject. The Bell. following points were there decided: It is a principle of the common law (f) that trading with an enemy without licence from the Crown is illegal. Purchase of goods in an enemy's country during the war is trading with the enemy, though it be not shown that they were actually purchased from an enemy: and an insurance of goods so purchased is void. As to insurances originally effected in time of peace: "When a British subject insures against captures, the law infers that the contract contains an exception of captures made by the Government of his own country" (g). (a) Printing and Numerical Registering Co. v. Sampson, 19 Eq. 462, 465. (b) The rule does not apply to British subjects domiciled abroad: Bell v. Reid, 1 M. & S. 726. (c) 7 E. & B. 782. (d) Espositov. Bowden (in Ex. Ch.), 7 E. & B. 763, 779. (e) 8 T. R. 548. (f) In the Admiralty it was already beyond question: see the series of precedents cited in Potts v. Bell. (g) Furtado v. Rodgers, 3 B. & P. 191, 200; Ex parte Lee, 13 Ves. 64. S Effect of war on The effect of the outbreak of war upon subsisting contracts between subjects of the hostile states varies according to the subsisting contracts. nature of the case. It may be that the contract can be lawfully performed by reason of the belligerent governments or one of them having waived their strict rights: and in such case it remains valid. In Clementson v. Blessig (a) goods had been ordered of the plaintiff in England by a firm at Odessa before the declaration of war with Russia. By an order in Council six weeks were given after the declaration of war for Russian merchant vessels to load and depart, and the plaintiff forwarded the goods for shipment in time to be lawfully shipped under this order it was held that the sale remained good. Bills of exchange between England and hostile country. If the contract cannot at once be lawfully performed, then it is suspended during hostilities (b) unless the nature or objects of the contract be inconsistent with a suspension, in which case "the effect is to dissolve the contract and to absolve both parties from further performance of it (c). The outbreak of a war dissolves a partnership previously existing between subjects of the two hostile countries (). In Esposito v. Bowden a neutral ship was chartered to proceed to Odessa, and there load a cargo for an English freighter, and before the ship arrived there war had broken out between England and Russia, and continued till after the time when the loading should have taken place: here the contract could not be performed without trading with the enemy, and in such a case it is convenient that it should be dissolved at once, so that the parties need not wait indefinitely for the mere chance of the war coming to an end, or its otherwise becoming possible to perform the contract lawfully (c). Here Questions have arisen on the validity of bills of exchange drawn on England in a hostile country in time of war. the substance of the transaction has to be looked at, not merely (a) 11 Ex. 135, and on the subject generally see the reporters' note, pp. 141-5. (b) Ex parte Boussmaker,13 Ves. 71. (c) Esposito v. Bowden, 7 E. & B. 763, 783, 27 L. J. Q. B. 17 (in Ex. Ch.) revg. s.c. 4 E. & B. 963, 24 L. J. Q. B. 210. For a later application of the same reason of convenience cp. Geipel v. Smith, L. R. 7 Q. B. 404. A contract to carry goods has been held to be only suspended by a temporary embargo, though it lasted two years: Hadley v. Clarke, 8 T. R. 259. Sed qu. is not this virtually overruled by Esposito v. Bowden, (d) Griswold v. Waddington, 15 Johns. (Sup. Ct. N. Y.) 57, in error, 16 ib. 438. the nationality of the persons who are ultimately parties to an action on the bill. Where a bill was drawn on England by an English prisoner in a hostile country, this was held a lawful contract, being made between English subjects; and by the necessity of the case an indorsement to an alien enemy was further held good, so that he might well sue on it after the return of peace (a). But a bill drawn by an alien enemy on a domiciled British subject, and indorsed to a British subject residing in the enemy's country, was held to give no right of action even after the end of the war: for this was a direct trading with the enemy on the part of the acceptor (b). It seems proper to observe that these cases must be carefully distinguished from those which relate only to the personal disability of an alien enemy to sue in our courts during the war (c). against friendly On the other hand, an agreement cannot be enforced in Eng- Hostilities land which has for its object the conduct of hostilities against a power at peace with the English government, at all events by nation rebellious subjects of that power who are endeavouring to esta- can't be subject of blish their independence, but have not yet been recognized as in- lawful dependent by England. This was laid down in cases arising out contract. of loans contracted in this country on behalf of some of the South American Republics before they had been officially recognized. "It is contrary to the law of nations, which in all cases of international law is adopted into the municipal code of every civilized country, for persons in England to enter into engagements to raise money to support the subjects of a government in amity with our own in hostilities against their government, and no right of action can arise out of such a transaction" (d). The Supreme Court of the United States has held however that an assignment of shares in a company originally formed for a purpose of this kind was so remotely connected with the original illegality of the loan as not to be invalid between the parties to it (e). (a) Antoine v. Morshead, 6 Taunt. 237, cp. Daubuz v. Morshead, ib. 332. (b) Willison v. Patteson, 7 Taunt. 439. The circumstances of the indorsement seem immaterial. (c) Such are McConnell v. Hector, 3 B. & P. 113; Brandon v. Nesbitt, 6 T. R. 23. As to prisoners of war here, Sparenburgh v. Bannatyne, 1 (d) Best, C. J. De Wütz v. Hend- 232. Neutral risk of capture only, not It is not a "municipal offence by the law of nations" for trade with citizens of a neutral country to carry on trade with a blockaded belligerents is at port-that is, the courts of their own country cannot be expected to treat it as illegal (though of course it is done at the risk of seizure, of which seizure, if made, the neutral trader or his government cannot complain) and agreements having such trade for their object-e.g. a joint adventure in blockaderunning-are accordingly valid and enforceable in the courts of the neutral state (a). unlawful. Exceptional treatment revenue laws. : Several decisions on this topic of aiding or trading with enemies have been given in the American courts in cases arising out of the Civil War. They will be found collected in the last edition of Mr. Story's work (b). It is admitted as a thing required by the comity of nations that an agreement to contravene the laws of a foreign country of foreign would in general be unlawful. But it is said that revenue laws (in practice the most important case) are excepted, and that “no country ever takes notice of the revenue laws of another" (c).As a general proposition, however, this is strongly disapproved by most modern writers as contrary to reason and justice (d). It should be noted that our courts, so far as they have acted upon it, have done so to the prejudice of our own revenue quite as much as to that of foreign states. Thus a complete sale of goods abroad by a foreign vendor is valid, and the price may be recovered in an English court, though he knew of the buyer's intention to smuggle the goods into England. "The subject of a foreign country is not bound to pay allegiance or respect to the revenue laws of this" (e). But it is admitted that an agreement to be performed in England in violation of English revenue laws would be void-as if, for example, the goods were to be (a) Ex parte Chavasse, 4 D. J. S. 655, see Lord Westbury's judgment; The Helen, L. R. 1 Ad. & Ecc. 1, and American authorities there cited; Kent, Comm. 3. 267. (b) Texas v. White, 7 Wallace 700 (where however the chief points are of constitutional law); Hanauer v. Doane, 12 ib. 342; Story on Contracts, § 744. Sprott v. U. S., 20 Wall. 459, goes beyond anything in our books, and the dissent of Field J. seems well founded. (c) Lord Mansfield in Holman v. Johnson, Cowp. 341. (d) Kent, Comm. 3. 263-266; Westlake on Private International Law, 185; Wharton, Conflict of Laws, $$ 484-5. (e) Holman v. Johnson, Cowp. 431; Pellecat v. Angell, 2 C. M. & R. 311-3, per Lord Abinger, C. B. smuggled by the seller and so delivered in England. And a * subject domiciled in the British dominions (though not in England or within the operation of English revenue laws) cannot recover in an English court the price of goods sold by him to be smuggled into England (a); and even a foreign vendor cannot recover if he has himself actively contributed to the breach of English revenue laws, as by packing the goods in a manner suitable and to his knowledge intended for the purpose of smuggling (b). The cases upholding contracts of this kind, whether as against our own or as against foreign laws, would probably not be now extended beyond the points specifically decided by them, and perhaps not altogether upheld (c). There is one modern case which looks at first sight like an authority for saying that our courts pay no regard to foreign shipping registration laws: but it really goes upon a different principle, and, besides, the law of the United States was not properly brought before the Court (d). laws. As to instruments which cannot be used in their own country Foreign for want of a stamp, it is now settled that regard will be paid stamp by the courts of other States to the law which regulates them, and the only question is as to the real effect of that law. If it is a mere rule of local procedure, requiring the stamp to make the instrument admissible in evidence, a foreign court, not being bound by such rules of procedure, will not reject the instrument as evidence it is otherwise if the local law "makes a stamp necessary to the validity of the instrument," i. e. a condition precedent to its having any legal effect at all (e). B. As to matters touching good government and the adminis. B. Public tration of justice. (a) Clugas v. Penaluna, 4 T. R. 466. It seems, but it is not quite certain, from this case, that mere knowledge of the buyer's intention would disentitle him. (b) Waymell v. Reed, 5 T. R. 599. (c) It must be remembered that the general law as to sale of goods, &c., which the seller knows will be policy as touching |