In 1862, A, domiciled in Athens, Ala., agreed to sell B, of Nashville, Tenn., a plantation, with the personal property thereon, situated in Tennessee. At the time of the agreement of sale, Athens, Nashville, and the plantation were all within the lines of the military forces of the United States. At the time the deed was made Athens and the plantation were within the Confederate lines, as was the place of B's resi dence at the time. Held, that neither contract nor deed was invalid. Moore's Digest, vol. 7, p. 250, citing Brown . Gardner, 4 Lea (Tenn.) 145. See Ware r. Jones (1878), 61 Ala. 288.

A contract made in 1862 by a county court within the Confederate lines, and under the control of the government of Virginia at Richmond, is valid and binding on such county (now forming a part of the State of West Virginia), where such contract was made under the Virginia statute of May 9, 1862, authorizing counties to purchase salt to be disposed of to the people, and the salt was actually delivered.

Moore's Digest, vol. 7, p. 250, citing Stuart, Buchanan & Co. v. County of Greenbrier, 16 W. Va. 95.

Contracts made by prisoners of war in the enemy's country for the purpose of obtaining subsistence are binding.

Moore's Digest, 1906, vol. 7, p. 250, citing Crawford v. The William
Penn. 3 Wash. C. C. 484.

SUSPENSION OR DISSOLUTION OF CONTRACT.

It is also a further consequence of the inability of the subjects of the two states to commune or carry on any correspondence or business together, that all commercial partnerships existing between the subjects of the two parties prior to the war are dissolved by the mere force and act of the war itself; though other contracts existing prior to the war are not extinguished, but the remedy is only suspended, and this from the inability of an alien enemy to sue or to sustain, in the language of the civilians, a persona standi in judicio.

Kent, vol. 1, p. 82.

The distinction as to contracts made before the war seems to be that suggested by the text; that those contracts are dissolved which cannot be performed except in the way of commercial intercourse. The William Bagaley, 5 Wall. 377, 407; and cases infra; 1 Duer Ins. Lect. 4, note 2 ad fin. p. 478; De Wahl v. Braune, 1 Hurlst. & N. 178, 182. Thus the relation of principal and agent between one in the North and another in the South was not suspended or dissolved during the rebellion. Monsseaux v. Urquhart, 19 La. An. 482. See Robinson v. International Life Ass. Co., 42 N. Y. 54; United States v. Grossmayer, 9 Wall. 72, 75. Nor were contracts of insurance. Manhattan Life Ins. Co. v. Warwick, 20 Gratt. 614, 634; New York Life Ins. Co. v. Clopton, 7 Bush, 179. On the other hand, a charterparty by which an Italian ship (neutral property in the subsequent war) was to proceed from England to Odessa, and there be furnished with a cargo by a British subject, was held to be dissolved by the breaking out of war between England and Russia, as it prima facie, at least, involved trading with the enemy. Esposito v. Bowden, 7 El. & Bl. 763; Barrick v. Buba, 2 C. B. N. S. 563; Reid v. Hoskins, Avery v. Bowden, 6 El. & Bl. 953.

Kent, vol. 1, p. 81, note.

All commercial partnerships, existing between the subjects of the two parties prior to the war, are dissolved by the mere force and act of the war itself; though other contracts, existing prior to the war, are not extinguished, but the remedy is only suspended, and this from the inability of an alien enemy to sue, or to sustain, in the language of the civilians, a persona standi in judicio.

Halleck, p. 358.

In ex parte Boussmaker [1806, 13 Ves. 71] (on a petition to be admitted to prove a debt under a commission of bankruptcy, which the commissioners refused to admit, upon the objection that the creditors applying to prove were alien enemies), Lord Chancellor Erskine said: "If this had been a debt arising from a contract with an alien enemy, it could not possibly stand, for the contract would be void. But if the two nations were at peace at the date of the contract, from the time of war taking place the creditor could not sue; but the contract being originally good, upon the return of peace the right would revive. It would be contrary to justice, therefore, to confiscate this dividend. Though the right to recover is suspended, that is no reason why the fund should be divided among the other creditors. . . The policy, avoiding contracts with an enemy, is sound and wise; but when the contract was originally good, and the remedy is only suspended, the proposition that therefore the fund should be lost is very different."

Should the rights under such contracts, however, have been confiscated, the right of action will not be so restored. The grounds of extinction are the impossibility of performance brought about by new conditions, and the fact that an alien enemy has no persona standi in judicio. But if an enemy be put in the king's peace by means of a flag of truce or other act of public authority, he thereby acquires the capacity to sue even during the war. Where contracting parties had agreed that no action should be maintainable unless brought within twelve months after the occurrence of a specified event, it was held that as outbreak of war made the parties enemies, the plaintiff was relieved from his disability to sue within the twelve months.

Phillipson, pp. 70–72; Gist v. Mason, 1 Term. R. 86; Semmes v. Hartford Ins. Co.. 13 Wall. 158.

As to contracts made before the war and which are not dissolved by the war, the doctrine of the suspension of an enemy subject's right of action is laid down in Ex parte Boussmaker by Erskine, L. C., who allowed the claim of an enemy creditor in a bankruptcy to be entered, so that the fund might not be shared amongst the remaining creditors, but reserved the dividend. Of course, a contract entered into prior to the war will remain valid in every respect if one or both of the belligerents should waive their strict rights.

Executory contracts whose terms require fulfillment during the war are avoided by the outbreak of hostilities, e. g., a contract of insurance previously effected is made void should the property covered become subsequently stamped with enemy character. And a similar doctrine was applied in America in a case of commercial partnership.

Phillipson, p. 72; Griswold v. Waddington, 16 John. 459.

Contract of affreightment.

The performance of a contract of affreightment is conditional on there being no prevention from any of the enumerated contingencies, including "the king's enemies," and sometimes also "the restraint of princes and rulers." If fulfilment is impossible without engaging in intercourse with the enemy, the contract is ipso facto dissolved. A declaration of war may at once render the contract void. All goods in the enemy country are vested with enemy character; hence, in the absence of a special licence, exportation becomes unlawful, and the agreement relating thereto null. Accordingly, if a shipowner carries a cargo under such circumstances as amount to trading with the enemy, an action to recover freight so earned will not be entertained.* If enemy goods are seized on board a neutral vessel, the captor must ordinarily pay full freight to the neutral carrier, but not so if the goods are contraband." If an enemy vessel is seized with a neutral cargo on board, the captors may take the goods to their destination, and receive the freight thereon. But should restoration of both ship and cargo be effected without unlivery, the original contract is not dissolved, and the parties are put into their original position.

A mere apprehension that the place of loading is about to become hostile is not sufficient to cause an abandonment of the contract; the restraint must be actual and operative, and not merely expectant and contingent. On the other hand, "an apprehension of capture founded on circumstances calculated to affect the mind of a master of ordinary courage, judgment, and experience, would justify delay"; hence no action for damages would lie in case of deviation in the voyage or detention of the vessel in neutral waters in order to avoid imminent risk of capture. Apart from the understood exceptions, should any circumstances arise which would render the lawful fulfillment of the contract impossible, e. g., in case of a port being blockaded, it is dissolved by force majeure, on the principle that "lex non cogit ad impossibilia." An embargo does not operate in this way; it merely effects a temporary suspension of the contract and the liabilities thereon for the time being; and on its removal the contract is restored.10 But should it continue so long, or is laid under such circumstances, as in fact to defeat the object of the voyage, the contract would be dissolved.11

Phillipson, pp. 76–78.

1 Reid v. Hoskins, 26 L. J. Q. B. 5.

9

Avery v. Bowden (The Lebanon), 25 L. J. Q. B. 49; 26. ibid. 3.

Esposito v. Bowden, 27 L. J. Q. B. 217; 24 ibid. 10.

Muller v. Gernon, 3 Taunt. 394.

The Copenhagen, 1 Rob. 289; The Hoop, ibid. 196.

The Mercurius, 1 Rob. 288; The Commercen, 1 Wheat. 382.

Atkinson v. Ritchie, 10 East, 530; Osgood v. Groning, 2 Camp. 466.

Cf. The San Roman, 3 A. & E. 583; 5 P. C. 301. See also The Patria, 3 A. & E. 436; The Express, ibid. 597; The Heinrich, ibid. 424.

Baily v. De Crespigny, 4 Q. B. 180.

Hadly v. Clarke, 8 T. R. 259. "Geipel v. Smith, 7 Q. B. 404.

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Insurance of enemy goods.

According to Continental practice, insurance of enemy goods against capture at sea by the insurer's own State was prohibited from early times. This was the case in France, Spain, Italy, the Netherlands and Germany (with the occasional exceptions made in favour of the Hanse Towns). Thus, the Guidon de la Mer (a collection of maritime rules dating from the end of the sixteenth century, and almost entirely adopted in a French ordinance of 1681) says insurance of enemy property is not legitimate in time of war: "En temps de guerre ou d'hostilité, les sujets de Sa Majesté ne pourront prester ou supposer leur nom pour charger denrées appartenant à ses ennemis." At the time of the outbreak of the wars of the French Revolution the principle was universally accepted. Bynkershoek distinctly affirms the unlawfulness of insuring ships or cargo which are liable to capture by the law of war: "... Naves mercesque, quas jure, belli occupare et publicare licet, quaccumque demum fuerint, assecurare non licet." In this country the practice was for a long time different. Till 1800 there had been no decision as to its illegality. In that year it was held, in the case of Potts v. Bell, that the illegality of insurance was a natural consequence of the unlawfulness of all commercial intercourse. To allow such contracts would be detrimental to national policy. In 1802, in Furtado v. Rodgers,2 any contract of insurance, whether made before the war or after the war, was declared illegal and void. "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.' The House of Lords in 1902 re-asserted the principle, but limited its application to losses of the King's enemies during actual hostilities, and not to acts done in contemplation of war.3

1

But practice as to such insurance varied at different times, and still varies in different places. Thus, as to Dutch and German practice, a Continental writer says: "La législation hollandaise ne contient aucune disposition qui ait pour effet d'interdire l'assurance de la propriété ennemie; à Hambourg aucun assureur ne songerait á se soustraire à l'obligation de payer l'indemnité d'un sinistre, sous prétexte que l'objet assuré appartient à un ennemi."4

No action can be maintained on a policy on an alien enemy's property, even though of British manufacture and exported from this country. An insurance effected on behalf of an alien enemy is void, though the goods be shipped before the outbreak of hostilities.

1 C. xxi, p. 200.

2 B. & P. 191, 200.

3 Janson v. Driefontein Mines Co., A. C. 484.

* E. Friquet,

"Traités des Avaries Communes et Particulières," vol. 1, p. 17. Bristow v. Towers, 6 T. R. 35.

Brandon v. Nesbit, ibid. 23.