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INTERESTING JUDGMENT. CLAIM FOR PASSAGE MONEY

FROM THEN. D. L

THE HONGKONG DAILY PRESS, WEDNESDAY, AUGUST 1ST. 1017.

passenger vessels from Europe to Hong- kong since the outbreak of war

proclamation shall be deemed to pro bibit payments by or on account of enemies to persona resident, carrying on business, or being in our dominiony, if such payments arise out of transactions of t entered into before the outbreak of wor

The case now comes before us by agree ment for the decision of certain issues

documents in relation to which had become void and unenforceable as regards any obligations of performance after the outbreak of war; and to carry out their The judgments of the Chief Justice (Sir Williato Bees Davies) and of the original obligations would involva entar- Puise Judge (fr. H. H. J. Gompertz)ing into contractual relations with the

King's enemies. have been given in the action in which

After cilin the

the language of Lord Mr. C. Beswick claimed the return of he Matthews as liquidators of the case, Serutton J. said (p. 390):-"Where, about receipts; but I think it must be in the judgment of the learned Chief passage money from Messrs. Lowe, Bing Lindley, which I have set out in Janson's

Norddeutscher Lloyd.

however, a claim has accrued before the The claim, which was heard in Chamar under a contract, made before the bern, was for $339. 18, danuged for breach war, as in ense of a loss before the war of contract to supply plaintiff's wife with on a policy of insurance, the contract is a first class passage from London to not dissolved, but the remedy suspended Hongkong, being as to $732.90, amount till the close of the war. This explains paid by the plaintiff P. & 0.

Company on

and, September. 1914,

to #8

the

The first of those is whether the con- or otherwise permitted. In termia the tract between the parties was dissolved clame purports to allow payments by or on the outbreak of war.

The question has been fully dealt with on account of the enemy and says nothing

Justice, which I have rend, and with which I entirely agree

As, however, this case has been taken as a test case, I have decided to deal shortly with some of its aspecta

There is ample authority for the pr 'position that, by, the Common Law, a contract with an alien which remains purely executory is dissolved by the out-

construed to authorize if such authority be necessary the receipt by a British sub ject of a payment so made. If this is no, the performance by the defendant of bis obligation did not involve any unlawful act on the plaintifs part, and I see no Lord Halsbury's apparently general reason why the defendant should be the to

8th statement at p. 493 of Janson v. Driefon-treated as released? the.

tein Consalidated Mines that:- No con- Now is there any direct, analogy be balatice, of interest on the said sum from tract or other transaction with a native tween the case last referred to anl the break of war between this country and of the country which afterwards goes to present one! In order for Mrs. Beswick return passage it would war is affected by the war. The remedy to obtain a is indeed suspended: an alien enemy clearly have involved anlawful inter- carnot sue in the Courts of either coun- course with the aliens after war try while the war lasts: but the rights declared, which would have discharged on the contract are unaffected, and when the latter from their obligations. Ás a the war is over the remedy in the Courts -fact it is not suggested that any attempt

was ever made to procure a return ticket of either is restored. This is trite of a right to recover vested before the war, Such an attempt would have been futile. which was the state of things in the it would have been clearly impossible Priefontein case. but was not true on for Mrs. Beswick to have travelled on an the existing authorities which Lord enemy ship after the declaration of war Hamry cannot have meant to overrule without reference to them, in the case of

8th September, 1014, to 30th June, 1938.

Mr. E. Davidson (of Mesars Hastings in behalf Hastings) appeared of the defendante, and Mr. C. D. Wil kinson represented the plaintiff.

The caso came into open court for one day, and Mr. Davidson then argned that the contract between plaintiff and defendants was rendered illegal and nul: and void by the outbreak of war.

THE CHIEF JUSTICE.

The judgment of the Chief Justice was as follow:-

These are certain issues of law, which

was

In so far as this action is based on the contract, this is, I think, the answer

the parties agreed should be firstly heard contracts to be executed at the time of to it and it disposes of the case.

and decided in an action- brought against the Liquidators of an alien enemy Company claiming damages for breach of

contract..

the outbreak of war.

In Halsey ». Lowenfeld, 1016 9 K.B. 707 (1916), it was decided that the liability of nu alien enemy lessee for rent ac orning due after the outbreak of war The facts were fully ses out in a judg-under a lense granted before the war is ment given by me on a summons by the

not thereby extinguished or released. defendants for a stay of proceedings 'so

The principles laid down in this case as to permit the Arbitration Clause, were strongly relied upon by Mr. Wil which was alleged to govern the conkinson in support of his argument. tracts. to operate within the Jurisdiction

Lord Reading/0.J., said, p: 713 :-""The of the Court at Bremen. I dismissed that prohibition of intercourse between per summons: bat the issue which we araons in this country and alien enemies is now called upon to decide was not raised based on public policy, and it would or referred to in the argument on that indeed be a strange result if a law so founded was held to apply to relieve an The question firstly before us is, was alien enemy of obligations incurred the alleged contract to supply the plain-before the war in respect of property of tiff with a passage ticket from Lendon which he is not deprived by the Crown." to Hongkong dissolved upon the outbreak of war 1.

summons.

It are, the action must fail, and the

other issues da not arise,

thorities on the point:---

die:

Warrington, Ind., specifically eriminates between cases where the pro clamation against trading with the enemy

Mr. Wilkinson, however, submitted in argument certain general principles of law as applicable. He contended that a party cannot avail itself of its own wrong, and, impliedly, that every in dividual enemy subject being responsible for the existence of war, they (the de- fendants) have disabled themselves for carrying out their contract and are

that of the aliss. (See the cases of Exposito e, Bowden, 7 E. and 8. 763, Roid y: Hoskyni, 6 E. and B. $53, and also. Chitty's Contracts, 16th Edition, page, 194, and Leake's Contracte, 5th Edition,; page 498.)

Again, when the contract is construed by the law of this country, an impos sibility caused by foreign law or the set of a foreign State does not discharge the contract. Jacob v. Credit Lyonnais 12 Q.B.D. 580, Blight . Page, 3 B. and P. 285; Barker . Hodgson, 3 M. and S. *9557.

In the last case Lord Ellenborough, C. J., said at page 270: If indeed the per- Formance of this covenant had been rendered unlawful by the Government of this country, the contract would have been dissolved on both sides, and this defendant, inasmuch as he had been thus compelled to abandon his contract, would hava been excused for the non-perfor-

mance of it, and not liable to damages.

"But it, in consequence of events which

responsible to the plaintiff therefor.

In support of his contention he relied on the language of the Court of Appeal happen at a foreign port the freighter in Porter r. Freudenberg, 1915, 1, . B. is prevented from furnishing a loading 857, and other recent cases, which there, which he has contracted to furnish, establish the position that the suspension the contract is neither dissolved, nor is of a legal right upon the outbreak of war he excused for not performing it, but cannot apply to the detriment of a Bri-must answer in damages" tish subject and for the benefit of an

alien enemy.

I examined these cases carefully in the judgment which I gave on the former summons, and I think it is only, noves sary to say that I can discover nothing in them which overrides the well established law that on the outbreak of war contracts with an alien enemy ba conis illegal.

In Robinson & Co. Continental Insurance Company, 1815, 1, K. B. 150,

was no rule the Court held that there which suspends an action against an

In the present case the plaintiff bad discharged his side of the contract in ab far as he had paid the passage, money, The consideration on his part was en excited consideration. But it still re- mained for the plaintiff's wife to apply to the Company for a passage, and to

be ready and willing to accept it if the defendants

This offered her one..

it is

quite olear she was unable to do while the war lasted

The matter is put very clearly by Warrington, L.J., in Hulsey & Lowen- feld, 1916, 4K B. 707, at page 716: --! It

I will shortly examine the recent auThe following general proposition

are, I think, clearly established: (1). By In Kreglinger. Cohen, 31 T.L.R. 502 the common law of England on the out- (July 1916), the plaintiffs, who were Bel-break of war between Great Britain and gians carrying on business in Antwerp another nation it becomes unlawful for and London, made with the defendants, British subject to engage in any inter- who were Germans trading in Hamburg, course with an enemy, whether of a com- and before the war in London also, cermercial nature or otherwise, unless it be tain contracts for the purchase of hides with the permission, express or implied, After the outbreak of war the defendante of the executive authority. (2). It fol. alien enery, nor any role which prevent follows that if a contract at the outbreak | repudiated the contracts, In an action, lows that any intercourse on the part of him appearing and conducting his de of war remains to be performed by both by the plaintiffs for damages it was held a subject of Great Britain with an enemy fence. The learned Judge stated that parties, it would be unlawful for that

incidental to the performance by either knew nothing of the merits, and that that as the plaintiffs were subjects of a State allied with this country, the con-party al contractual obligations is un-1any application was made to post be an illegal contract and both partice

lawful.'*

tracts, having been made, with a person who was a subject of a State now at war with this country, became illegal on the butbreak of war, and after that date there could be no breach of them, and therefore, the plaintiffs vers not entitled

to recover.

In that case W. Wolf & Sons v. Carr, Parker & Co., 31 T.L.R. 407, was follow od:-

After, referring to certain authorities the learned Lord Justice proceeds:---

he

if

the case on sufficient ground it would be dealt with on its merits,

And, again, the judgment in Porter Freudenberg, 1915 1, R. B. 857, is also "It follows that, if a contract at the directed to the relative position of an outbreak of war remains to be performed alien enemy when plaintiff and defend by both parties, it would be unlawful unt are in our Courts, and it lays down for that one of them who is a British as an authoritative judgment of the subject to perform his part. The con- Court of Appeal that an alien enemy can tract would be an illegal contract and be sued and defend in our Courts. The both parties would be discharged. Iquestion of the rights of the parties in The plaintiffs, who were a German firm think, moreover, that though the sub-contract or otherwise did not arise. with a branch business in England, stantive obligation to be performed is In my opinion the action for damages brought an action, after the outbreak of that of the enemy only, yet if its per the contracı fails and must be dis- war, upon contracts entered into by theformance necessitates the concurrence of missed. English branch before the war. It was the other party, the promisee, and that On the alternative dair for money held by the Court of Appeal that on the involves unlawful intercourse with the outbreak of war the contracts became alien, the latter would be discharged illegal.

from its obligation. This is really only an example of the general rule, for the concurrence of the promises would be afforded in pursuance of a duty arising The Puisne Judge's Ending was from the contractual relation. The follow --- only substantive obligations as between

This is a claim against the liquidator Company for damages for an alleged breach of contract by the Company

In the Panarellos, 31 T.L.R. 325, the President, Sir Samuel Evans, said:--

paid for a consideration which has failed, and on which payment into Court is pleaded, the Coure is not on this issue concerned with.

THE PUISNE "JUDGE,

28

one of them who is a British subject to perform his part. The contract would

would be discharged. I think, moreover, that though the substantive obligation to be performed is that of the enemy only, yet if its performance necessitates the. concurrence of the other party, the pro- misce, and that involves unlawful inter- course with the illen, the latter would is really enly an example of the general be discharged from his obligation. This

rule, for the concurrence of the promisee would be afforded in pursuance of a duty Brising from the contractual velation."

This passage, which the Chief Justice has also cited in his judgment, seems to me to conclude the matter.

Mr. Wilkinson never, of canter, con tended that Mrs. Beswick would have been willing to embark on a German ship during the continuance of the wardenne He did not I think, in fact depart from the position in paragraph 3 of his original statement of claim, although in fact this part of paragraph 3 was amend- ed before this argument. The paragraph

I refer to reads as follows:- By reasons of such outbreak of war, it became illegal for the plaintiff or his wife to have further commercial or other transactions with the shipping company.

This statement, to my mind, accurately states the position at the outbreak of war. Again, 10 the old form of pleading (see Bullen and Leakes Pleadings, 3rd Edition, page 135, where is given a count against a carrier for not carrying a passenger who has booked bis-pince) it was necessary. The facts of the case, which have been to aver that all conditions were fulfilled,

marized as follows

and all things happened, and all time to be carried. elapsed necessary to entitle the plaintiff

When war breaks out between States, all commercial intercourse between citi- zens of the belligerents ipso facto becomes illegal, except so far as it may be parties to the present action remaining of the Norddeutscher Floyd Steamship pressly allowed or licensed by the Head to be performed were those to be per of the State Where the intercourse is formed by the defendant. Of these the of a commercial nature, it is usually only one with which we are concerned is denominated trading with the enemy' the covenant for payment of the rest. fully stated in a previous judgment by This proposition is true also, I think, in The next question is, did the performancs, the Chief Justice, may be briefly rum all essentials with regard to intercourse of this obligation by the defendant re

So here the plaintiff must aver that his which cannot fitly be described as com- quire the concurrence of the plaintiffs

The plaintiff had before the war paid wife had applied for a page, and was mercial."

and, if so, would such concurrence the company in Hongkong for a passage Ent this ex hypothers he cannot do

ready and willing to accept the passage. See also Robson v. Premier Oil Co, unlawful I did require the plaintiffe" | Ltd., 1915, 9 Ch. 194, and Exposito t. concurrence, inasmuch as payment by one England, and thence, in due course, back pany being an enemy anbject in identifed ***The claim for damages therefore Tails. by one of the Company' a steamers to

Mr. Wilkinson argued that the Com Bowden, 7 E.B. 161.

party involved receipt by the other. Is

with its Government and therefore respon- In Janson v. Driefontein Consolidated does not follow, however, that such to Hongkong, for his wife.

The plaintiff's wife duly proceeded to Bible for the outbreak of war and cannot Mines, 1909. AC Lord Lindley said, receipt was unlawful, and I think tha

therefore arail itself of its own wrong War pruces a state of things giving proclau

tion of September 18th, 1914, England in a steamer of the Company doing use to well-known special rules. It pro establishes that it was not, but an act and while there, and before she had The answer is that there is no authority For this principle. Indeed, Kreglinger's hibit, all trading with the enemy, except permitted by the executive authority applied to the Company to be allotted a case, 31. T.L.R. 50%, and Halsey Lowen- with the Royal licence, and dissolves all The proclamation, after warning people, berth for the return voyage, war broke fald are authorities the other way of contracts which involve such trading."

the case of Davis ». Speel, I. O. and P. against doir certain acts and entering out between England and Germany

18, cited for the plaintiff it is only neces- Bhe did not, therefore, apply to the sary to say that it has no application Company for a return passage and the here. As there has been no breach the derpyet proper form of action cannot, be a claim Company have not in fact despatched for dama

In Arnhold, Karberg v. Blythe, 1915 g | Into K.B. 870, it was held that buyeza wzro ventitled to reject goods, the shipping lowing provision

involving contan the fol Nothing in this

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