This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
Even in the absence of an express license or of circumstances, other than those of war in general, from which an implied license might be inferred, the courts have in former times been inclined to recognize the validity of certain contracts made in time of war with the enemy across the lines of war on account of the special necessities of the case. At the time when privateering was encouraged, and when the crews of public vessels were allowed a share in prize money arising from the proceeds of captured enemy merchant vessels, it became the custom for the captor to permit the captured vessel to go free on receiving a ransom bill which provided for the payment of a certain amount of money as consideration for such release from capture.1 This practice was very beneficial to the owners of the captured vessel and cargo, for the amount exacted as ransom was naturally much less than the value of the goods, and it was very beneficial to the captor personally, since it relieved him from the necessity of taking his prize into port and dividing his crew, and made it possible for him to effect many more captures in a given space of time than he could otherwise. For these reasons, and without considering the interests of the government, the courts of admiralty were inclined at a very early period to enforce ransom bills if given to a citizen of an enemy government,2 although a ransom effected by pirates was held to be illegal;3 and if paid, could be recovered if the party to whom the payment was made was within the jurisdiction of the court.4 The courts of admiralty continued for a long period of time to enforce ransom bills and contracts for ransom,5 although the difficulty of distinguishing in all cases between a privateer and a pirate led to the custom of taking hostages to enforce payment of the ransom.
8 The Sea Lion, 72 U. S. (5 Wall.) 630, 18 L. ed. 618; Coppell v. Hall, 74 U. S. (7 Wall.) 542, 19 L. ed. 244.
9 The Hiram, 12 U. S. (8 Cranch.) 444, 3 L. ed. 619; The Hiram, 14 U. & (1 Wheat.) 440, 4 L. ed. 131; Patton v. Nicholson, 16 U. S. (3 Wheat.) 204, 4 L. ed. 371.
The common law recognized the validity of these contracts when brought before them collaterally.6 A contract by which a captain agreed to pay the wages of a seaman if he would consent to act as hostage, was held to be valid.7 The common-law courts refused to prohibit the sentence of a court of admiralty against a vessel for ransom.8 A draft drawn by the captain of the captured vessel for ransom was held to be enforceable if properly accepted.9 The immunity conferred upon the ransom vessel until it had completed its voyage, was held to exist not only against all vessels of the country of the captor, but also against all allies.10
IFor a general discussion of this subject, see Ransom Bills, by W. Senior, 34 Law Quarterly Review, 49.
2 Libels in Admiralty, File 13, Nos. 83 and 92 (1545 A. D.), 11 Selden Society (2 Select Pleas in Admiralty), p. Ixvi; Libels in Admiralty, File 32, No. 30 (1561, 1562), 11 Selden Society (2 Select Pleas in Admiralty), p. lxviii.
3 Joliff v. Bawdett, 11 Selden Society (2 Select Pleas in Admiralty) 164.
4 Joliff v. Bawdett, 11 Selden Society (2 Select Pleas in Admiralty) 164.
5 The Charming Nancy, Marsden's Admr. 398; The Patrixent, Marsden's Admr. 398.
6 Yates v. Hall, 1 T. R. 73; Wilson v. Bird, 1 Ld. Raym. 22.
7 Yates v. Hall, 1 T. R. 73.
8 Wilson v. Bird, 1 Ld. Raym. 22.
9 Goodrich v. Gordon, 15 Johns. (N. Y.) 6.
10 Miller v. The Resolution, 2 U. S. (2 Dall.) 1, 1 L. ed. 263.
The attempt was finally made to enforce ransom bills in a court of common law by a direct action against the owner of the vessel or of the goods on whose behalf the ransom bill was given, instead of proceeding in admiralty against the vessel on behalf of the hostage. At one time the English courts under Mansfield's influence seemed inclined to receive this bit of admiralty law and to allow such an action;11 and this view was entertained by the courts of the United States.12 In a subsequent case, however,13 some of the judges appear to differ from Lord Mansfield as to the power of the common-law courts to enforce bills of ransom; and a judgment, rendered in form for the plaintiff in order to permit the parties to go to a higher court, was reversed on error on the ground that an alien enemy could not sue in English courts to recover a right which he had claimed to acquire during actual war.14 While the facts in this case arose before English legislation, the result was possibly influenced by the fact that Parliament had come to the conclusion that the interests of the government should be considered rather than those of the privateer and of the captured vessel; and it had forbidden contracts for the ransom of an English vessel.15 With the disappearance of privateering, the capture of enemy vessels on the high seas by private enterprise for the purpose of gain ceased, and with it ceased the practice of giving ransom bills.
Considerations of humanity induced the courts to uphold contracts made with alien enemies who were domiciled in an enemy country for the support of prisoners of war.16