is that perhaps some day somebody who is not an enemy alien may have a right to sue the company for the amount assured. It seems to me this is one of those cases where the right is suspended.

I also think it cannot possibly be said here that mere receipt of the premiums by the company is unlawful intercourse with the enemy, and that really is the whole question. The payment itself cannot be illegal. Then, having regard to the result of the payment, can it be illegal? I say "no," because as regards the enemy alien himself he gains nothing by the transaction while he is an enemy alien. I come, therefore, to the conclusion that the company were bound to hand over the securities without reservation to the surety upon payment of the debt, and that the limitations they propose to insert in the assignment are not justified. There will be a declaration that the policies did not become void only by reason of Baron von Liebermann becoming an alien enemy, that the payment and receipt of premiums are not unlawful intercourse with an alien enemy, and that on payment of the amount due under the mortgage the plaintiff will be entitled to an assignment of the policies without reservation in accordance with the terms of the proviso for redemption.

NOTE. It is held in all Anglo-American jurisdictions that the existence of war operates to interrupt all direct relations between the subjects of the two belligerents on the ground that intercourse is inconsistent with a state of war. This is treated as a rule of international law, but it is impossible to reconcile this with the fact that many countries, e. g., Holland, Germany, Austria-Hungary and Italy, permit commercial relations with enemy subjects to continue until expressly forbidden and with the further fact that both Great Britain and the United States mitigate the hardship of the rule of non-intercourse by issuing licenses to trade. and such licenses are not in conflict with any rule of international law. The rule is really one of domestic policy only. Its source was correctly stated by Lord Shaw of Dunfermline in Daimler Co. Lt. v. Continental Tyre and Rubber Co. Ltd., L. R. [1916] 2 A. C. 307, 328:

War is not war between Sovereigns or Governments alone. It puts each subject of the one belligerent into the position of being the legal enemy of each subject of the other belligerent; and all persons bound in allegiance and loyalty to His Majesty are consequently and immediately, by the force of the common law, forbidden to trade with the enemy Power or its subjects.

Several reasons have been assigned for the enforcement of the rule. In general it is based upon the danger to the state of allowing transactions which can so easily be made the medium of treasonable com

munications. But in Brandon v. Nesbitt (1794), 6 T. R. 23, the injury that non-intercourse might inflict upon the enemy was first put for ward as the reason for the practice, while in Esposito v. Bowden (1857), 7 E. & B. 764, and in Kershaw v. Kelsey (1869), 100 Mass. 561, trade with the enemy was condemned because of its tendency to increase the enemy's resources. It may also be suggested as a practical consideration that if unrestricted trade with the enemy were to be permitted, it would require a degree of supervision which would impose an intolerable burden upon the government concerned.

There is a growing opinion in Anglo-American jurisdictions in favor of a relaxation of the rule. So long as a belligerent can forbid its subjects to trade with the enemy when circumstances appear to require such a measure, it would seem that its interests are sufficiently safeguarded, and until affirmative action to the contrary is taken nor mal relations between individuals should not be interrupted. But the older rule is firmly embodied in judicial decisions, and has been asserted unequivocally by the British Prize Court in the Great War. In The Panariellos (1915), 1 Br. & Col. P. C. 195, 198, Sir Samuel Evans said:

When war breaks out between States, all commercial intercourse between citizens of the belligerents ipso facto becomes illegal, except in so far as it may be expressly allowed or licensed by the head of the State.

An attempt was made to introduce a more liberal rule at the Second Hague Conference by the adoption of section h of Article XXIII of Regulations respecting the Laws and Customs of War on Land; but the language of the section is ambiguous and the subject received so little discussion that the Conference can hardly have realized what far-reaching changes the new rule involved.

Among the many cases in which the old rule has been applied these may be noted: Potts v. Bell (1800), 8 T. R. 548 (goods purchased after the outbreak of war in an enemy country but not necessarily from an enemy subject and imported in a neutral ship); The Jonge Pieter (1801), 4 C. Robinson, 79 (trade with the enemy through a neutral port); The Odin (1799), 1 C. Robinson, 248 (fraudulent transfer to a neutral of property engaged in enemy trade); Willison v. Patteson (1817), 7 Taunton, 439 (the rule applied to all contracts made during war and not merely to those of a commercial nature and even though suit be not brought until the close of the war); The Mashona (South Africa, 1900), 17 Buchanan, 135 (cargo in a British vessel consigned by British merchants to neutral merchants domiciled in enemy territory); The Neptunus (1807), 6 C. Robinson, 403; The Panariellos (1915), 1 Br. & Col. P. C. 195; The Parchim (1915) 1 Ib. 579 (the courts of any of a group of allied states may condemn the goods of a subject of any such states who violate the rule of nonintercourse); The Bernon (1798), 1 C. Robinson, 101; The Ocean (1804), 5 Ib. 90; The Juffrow Catherina (1804), 5 Ib. 141; The Manningtry (1915), 1 Br. & Col. P. C. 497; The Lützow (Egypt, 1916), 2 Ib. 122 (a belligerent or neutral subject engaged in trade in an

enemy country must withdraw seasonably).

In The Rapid (1814),

8 Cranch, 155, the court held that an American who sent an agent to Canada to bring away his property at the outbreak of war with Great Britain was engaged in intercourse with the enemy and his property was condemned. This is unduly rigorous and the case would probably not now be followed. A subject or a neutral who finds himself or his property in enemy territory at the outbreak of war should be given a reasonable opportunity to withdraw without in the meantime exposing himself to the penalty of trading with the enemy, and it was so held in Nigel Gold Mining Co. Lt. v. Hoade, L. R. [1901] 2 K. B. 849. A neutral partner is not obliged to withdraw from transactions with the enemy which were in progress at the outbreak of war provided he does nothing actively to facilitate them. His obligations in this respect are less stringent than those of subjects of a belligerent state, The Anglo-Mexican (1916), L. R. [1916] P. 112.

The rule of non-intercourse is directed not only against commercial relations but against intercourse of any kind. In The Cosmopolite (1801), 4 C. Robinson, 8, 10, Lord Stowell said:

It is perfectly well known, that by war, all communication between the subjects of the belligerent countries must be suspended, and that no intercourse can legally be carried on between the subjects of the hostile states but by the special license of their respective governments.

In The Rapid (1814), 8 Cranch, 155, 162 the Supreme Court of the United States said:

If by trading, in prize law, was meant that signification of the term which consists in negotiation or contract, this case would certainly not come under the penalties of the rule. But the object, policy and spirit of the rule is to cut off all communication or actual locomotive intercourse between individuals of the belligerent states. Negotiation or contract has, therefore, no necessary connexion with the offence. Intercourse inconsistent with actual hostility, is the offence against which the operation of the rule is directed.

This principle was applied by the Court of Appeal in Robson v. Premier Oil and Pipe Line Co. Lt. (1915), 113 L. T. Rep. 523, in which it was held that enemy shareholders in a British company may not during war vote for directors of the company nor may they delegate their voting rights to a proxy.

For many years the common law courts and the prize courts in Great Britain were in opposition in the views which they held as to whether insurance on enemy property was a permissible transaction. It would seem that contracts of insurance with enemy subjects or for the benefit of enemy subjects are in their nature as objectionable as any other form of contract, but Lord Mansfield, influenced perhaps by his strong bias in favor of the mercantile interests of England, argued that the premiums paid by the enemy and the opportunity which such transactions offered to obtain information from the enemy more

than counterbalanced any advantage to the enemy's trade. Hence for about fifty years an owner whose property had been condemned in a British pize court could go into a British common law court and recover its value from a British insurance company. See Henkle v. Royal Exchange Assurance Co. (1749), 1 Vesey, 317; Gist v. Mason (1786), 1 T. R. 84. This continued until 1794 when Lord Mansfield's decisions were overruled and the common law courts placed themselves in harmony with the prize courts. Brandon v. Nesbitt (1794), 1 T. R. 23; Bristow v. Towers (1794) 6 T. R. 35. (The argument of counsel for plaintiff in the latter case, pages 37-44, includes an account of the practice of the British Government and a full review of the cases.) Six years later the question again came up in the leading case of Potts v. Bell (1800), 8 T. R. 548, when the decisions made in 1794 were affirmed, and since that time the common law courts have consistently followed the admiralty rule.

While the right of a belligerent state to interdict all intercourse with enemy subjects is clear, it may find it advantageous to permit certain forms of commerce. This is done by means of licenses to trade, The Hope (1813), 1 Dodson, 226; Kensington v. Inglis (1807), 8 East, 273; Coppell v. Hall (1869), 7 Wallace, 542. Such a license, even if granted to an alien enemy, implies authority to insure, Usparicha v. Noble (1811), 13 East, 332; and to maintain an action in the courts, United States v. One Hundred Barrels of Cement (1862), 27 Fed. Cases, No. 15945. Licenses are construed liberally in order that the intent of the grantor may be made effective, The Cosmopolite (1801), 4 C. Robinson, 11; The Goede Hoop (1809), Edwards, 327; Flindt v. Scott (1814), 5 Taunton, 674, but conditions attached to a license must be strictly complied with, Camelo v. Britten (1824), 4 B. & A. 184. A license may be vitiated either by fraud in obtaining it, The Clio (1805), 6 C. Robinson, 67, or by misuse of it, Vandyck v. Whitmore (1801), 1 East, 475.

During the Great War, trade with the enemy was regulated by detailed measures of legislation. These are fully reviewed and hundreds of cases which have arisen under them are cited in Huberich, The Law Relating to Trading with the Enemy. For an analysis of German measures dealing with enemy property, see Thiesing, "Trading with the Enemy," Sen. Doc. 107, 65th Congress, 1st session: Huberich, "German Laws Relating to Payments to Alien Enemies," Columbia Law Review, XVII, 653.

On the effect of war on intercourse between enemy subjects see Baty, "Intercourse with Alien Enemies," Law Quarterly Review, XXXI, 30; Schuster, Effect of War and Moratorium on Commercial Transactions; Atherley-Jones, Commerce in War; Baty and Morgan, War: Its Conduct and Legal Results, 294; Bentwich, The Law of Private Property in War; Bordwell, The Law of War between Belligerents; Bonfils (Fauchille), sec. 1060; Cobbett, Cases and Opinions, II, 62; Page, War and Alien Enemies, ch. vi; Garner, I, ch. viii: Borchard, sec. 354; Hyde, II, 202; Moore, Digest, VII, 237.

SECTION 2. THE EFFECT OF WAR ON CONTRACTS.

GRISWOLD v. WADDINGTON.

COURT OF ERRORS OF NEW YORK. 1819.

16 Johnson, 438.

Error to the Supreme Court.

[Prior to the War of 1812, Henry Waddington, an American citizen resident in London, and Joshua Waddington, an American citizen resident in New York, were partners in a trading house in London. In the course of the war one of the plaintiffs went to England and entered into commercial relations with Henry Waddington. After the war the plaintiffs brought suit for the balance due on these transactions, and sought to charge Joshua Waddington as a partner of Henry Waddington. The judgment of the trial court in favor of the plaintiffs was reversed by the Supreme Court, and to reverse that decision this writ of error was brought.]

THE CHANCELLOR [JAMES KENT].

[The first part of the opinion is an exhaustive review of all the authorities on the effect of war on commercial relations between subjects of the belligerent states.]

It appears to me, that the declaration of war did, of itself, work a dissolution of all commercial partnerships existing at the time between British subjects and American citizens. By dealing with either party, no third person could acquire a legal right against the other, because one alien enemy cannot, in that capacity, make a private contract binding upon the other. This conclusion would seem to be an inevitable result from the new relations created by the war. It is a necessary consequence of the other proposition, that it is unlawful to have communication or trade with an enemy. To suppose a commercial partnership (such as this was) to be continued, and recognized by law as subsisting, when the same law had severed the subjects of the two countries, and declared them enemies to each other, is to suppose the law chargeable with inconsistency and absurdity. For what use or purpose could the law uphold such a connection, when all further intercourse, communication, negotiation, or dealing between the partners, was prohibited, as unlawful? Why