§ 743. Every contract made with an enemy, with knowledge that he is so, is void, unless it be made with the special permission of the government.3 Thus, a policy of insurance upon the property of an enemy is void.4 And the. same rule applies to the case of bills of exchange, promissory notes, and all other contracts, made with the subject of an enemy's country. This rule is said to obtain upon the ground that the resources of the enemy may be thereby increased and his wants supplied5 But this prohibition cuts both ways; for the resources of the other party may be equally increased, and his wants equally relieved. The true reason seems to be, that the two parties are at war, and it is the policy of war for each party to injure the other party to its utmost ability, even though such injury may be recoiling continually. Besides, no two countries can be at war while the citizens thereof are at peace, for the very objects of war might be thereby frustrated.
§ 744. It is partly on this ground at least that no action will lie for goods sold to aid in the late rebellion against the United States;6 and a note for such supplies stands on the same ground.1 So, a note by a person to a substitute, to pay for his serving in the Confederate army, is void.2 But a note given to pay for rent of a hospital building for Confederate soldiers, has been held good.3 So, a carrier employed in carrying Confederate troops to the war, is not liable for negligent injury to a captain of a Confederate company or crew.4 So, contracts founded upon or in consideration of Confederate notes, are not binding.6 And a note and mortgage, the consideration of which was a loan of Confederate notes, are void.6 But payment in Confederate notes, once accepted, cannot be recovered.7
1 Huntress v. Patten, 20 Me. 28.
2 Bell v. Day, 32 N". Y. 165 (1865); Condit v. Baldwin, 21 N. Y. 219.
3 See Griswold v. Waddington, 15 Johns. 57; s. c. 16 Johns. 438, in which the whole doctrine respecting the illegality of commercial intercourse between belligerents is thoroughly discussed, and the cases examined. 1 Kent, Comm. 68; Scholefield v. Eichelberger, 7 Peters, 586; Story on Bills, § 99 to 105.
4 Phillips on Insurance, subsec. 147, 223, 237 et seq., and cases cited.
5 Willison v. Patteson, 7 Taunt. 447, and cases cited in American edition.
6 Hanauer v. Doane, 12 Wall. 342 (1870); Texas v. White, 7 Wall. 700. See also Hamilton v. Nowlin, 5 Cold. 84 (1867); Tatum v. Kelley, 25 Ark. 210 (1868); Ruddell v. Landers, ib. 238; McMurtry v. Ramsey, ib. 349; Portis v. Green, ib. 376.
§ 745. So, also, all commercial partnerships existing between citizens of the two countries are dissolved by war, so that no new contract can arise between them pending such war.8 This rule was even carried so far, as to prohibit a remittance of supplies to a British colony, during its temporary subjection to the enemy, although the supplies were but partially and imperfectly made by the enemy, and when they were absolutely necessary.9 Nor can an ally engage in trade with a common enemy, without rendering himself liable to the penalty of seizure and forfeiture of property so engaged.10 If, however, a plaintiff be deceived by the defendant, and trade with him, not knowing him to be an enemy, he may, after the return of peace, maintain an action upon such a contract.
1 Waitzfelder v. Kahnweiler, 56 Barb. 300 (1870). The mere fact, however, that the profits of a firm come in part from work done for the Confederate government will not so far affect the whole profits as to make a note void which has been given by one member of the firm to another, though the note be founded on a division of that fund. Gullatt v. Thrasher, 42 Ga. 429 (1871).
2 Chancely v. Bailey, 37 Ga. 532 (1868); Pickens v. Eskridge, 42 Miss. 114 (1868).
3 Fottrell v. German, 5 Cold. 580 (1868).
4 Martin v. Wallace, 40 Ga. 52 (1869). And see Wallace v. Cannon, 38 Ga. 199.
5 Hale v. Sharp, 4 Cold. 276 (1867); Walker v. Walker, ib. 300.
6 Stillman v. Looney, 3 Cold. 20 (1866); Thornburg v. Harris, ib. 157 (1866); Gill v. Creed, ib. 295 (1866); Potts v. Gray, ib. 468 (1866).
7 Henly v. Franklin, 3 Cold. 472 (1866).
8 Griswold v. Waddington, 15 Johns. 57; s. c. 16 Johns. 438, 488; Seaman v. Waddington, 16 Johns. 510; Bank of New Orleans v. Matthews, 49 N. Y. 12 (1872); McStea v. Matthews, 50 N. Y. 166 (1872).
9 La Bella Giudita, cited in The Hoop, 1 Rob. Adm. 207.
10 The Nayade, 4 Rob. Adm. 251; The Neptunus, 6 Rob. Adm. 403.
§ 746. During war, all right of action is suspended between belligerents, unless the alien enemy be under the protection of the government; as, where he comes into the country by license during war; or being there at the time of the war, is permitted to continue. Thus, where, during a war between England and America, an American vessel, pretending to be a neutral, went into Bermuda, and in the character of a neutral obtained credit for repairs; it was held, that the owners of the vessel were answerable, on the restoration of peace, to the British merchants who aided them to repair; upon the ground that the plaintiffs were ignorant of the national character of the vessel, and dealt upon the faith that they were dealing with a neutral.1
§ 747. A license, however, from the government, legalizes the contracts of its subjects with foreign enemies, so that they may be enforced in the courts of the licensing government, and the party be protected from prize law.2 If, however, the license be limited, and its limitations be transgressed, it will legalize any contract, or portion of a contract, within its terms. Thus, where the license only extended to the importation of certain specific articles from the enemy's port, and others were taken on board, not included in the license; it was held, that the license protected the articles within its terms.3
§ 748. The only exception that obtains to this strict rule, is the case of ransom bills, which are contracts of necessity.4 But a ransom bill cannot be put in suit on the part of the alien enemy in the courts of the other belligerent. And in England, where such contracts were formerly legal, proceedings were always carried on in the name of the hostage suing for his liberty.1 A bill of exchange drawn or negotiated in favor of any person competent to sue, would, however, be binding, if it were given for a ransom of a captured ship, unless it were prohibited by some statute.2 So, also, a bill, drawn by a prisoner of war upon a fellow-subject resident in his own country, will be valid, whether it were made payable to an alien enemy, or indorsed to him, if it be for the purpose of obtaining necessaries and subsistence for the prisoner.3 So, also, in cases of cartel-ships, where bills are drawn and negotiated in the enemy's country, for purposes connected with the objects of the voyage, such as for necessary repairs, provisions, and other supplies, they are valid.4
1 See ante, Alien, § 54; Crawford v. The Wm. Penn, Peters, C. C. 106; Musson v. Fales, 16 Mass. 332. See Coolidge v. Inglee, 13 Mass. 46.
2 Patton v. Nicholson, 3 Wheat. 207, note; Crawford v. The Wm. Penn, Peters, C. C. 106.
3 Butler v. Allnutt, 1 Stark. 222; Keir v. Andrade, 6 Taunt. 498; Camelo v. Britten, 4 B. & Al. 184; Clark v. Protection Ins. Co., 1 Story, 128. 4 1 Kent, Comm. 68; Maisonnaire v. Keating, 2 Gall. 336.
1 The Rebecca, 5 Rob. Adm. 102; Maisonnaire v. Keating, 2 Gall. 325, 337, 341; Story on Bills, § 101. The statute of 43 George III. ch. 160, § 33-35, forbids contracts for ransoming captured property, and renders them void in England.
2 Cornu v. Blackburne, 2 Doug. 641; Anthon v. Fisher, 2 Doug. 649, note; Yates v. Hall, 1 T. R. 73; Maisonnaire v. Keating, 2 Gall. 325, 337, 341; Ricord v. Bettenham, 3 Burr. 1734; Brandon v. Nesbitt, 6 T. R. 23; Story on Bills of Exchange, § 101; Puffendorf de Jure Nat. et Gent. Lib. 8, cap. 7, § 14, and Barbeyrac's note; Vattel, B. 3, ch. 16, § 414.
3 Antoine v. Morshead, 6 Taunt. 237; Daubuz v. Morshead, 6 Taunt. 332; Duhammel v. Pickering, 2 Stark. 90; Bayley on Bills, ch. 2, § 9, p. 75, 76.
4 Potts v. Bell, 8 T. R. 548. See also Houriet v. Morris, 3 Camp. 303; The Hoffnung, 2 Rob. Adm. 162; The Cosmopolite, 4 Rob. Adm. 8; The Clio, 6 Rob. Adm. 67; Story on Bills, § 102, 103.
As to the operation of the doctrines of the text upon cases growing out of the late civil war in this country, between parties on opposite sides of the military lines, consult United States v. Six Boxes of Arms, 1 Bond, 446; Brown v. Hiatt, 1 Dill. 372; Dean v. Nelson, 10 Wall. 158; Ludlow v. Ramsey, 11 Wall. 581; Caldwell v. Harding, 1 Lowell, 326; Cocks v. Izard, 4 Am. Law T. Rep. 68; Elgee v. Lovell, 1 Woolw. 102; Hamiltom v. Mutual Life Ins. Co., 9 Blatchf. 234; Semmes v. Hartford Fire Ins. Co., 13 Wall. 158; Phillips v. Hatch, 1 Dill. 571; Montgomery v. United States, 15 Wall. 395; Butler v. Maples, 9 Wall. 766. As to contracts made between parties within the Confederate lines, see Thorington v. Smith, 8 Wall. 1; Hanauer v. Woodruff, 15 Wall. 439; Delmas v. Insurance Co., 14 Wall. 661; White v. Hart, 13 Wall. 646; Osborn v. Nicholson, ib. 654; Cappell v. Hall, 7 Wall. 542; McKesson v. Jones, 66 N. C. 258; Williams v. Monroe, 67 N. C. 33; Cronley v. Hall, ib. 9.