Contract and shipment plation of consigned to become the property of an enemy upon its arrival, be protected by the neutrality of the shipper. Such contracts, however valid in time of peace, are considered, if made in war, or in contemplation of war, as infringements of belligerent rights, and calculated to introduce the grossest frauds. In fact, if they could prevail, not a single bale of enemy's goods would ever be found upon the ocean.' Chancellor Kent, in his commentaries, says, that 'property shipped from a neutral to the enemy's country, under a contract to become the property of the enemy on arrival, may be taken, in transitu, as enemy's property; for capture is considered as delivery. The captor, by the rights of war, stands in the place of the enemy. The prize courts will not allow the neutral and belligerent, by a special agreement, to change the ordinary rule of peace, by which goods ordered and delivered to the master, are considered as delivered to the consignee. All such agreements are held to be constitutionally fraudulent, and, if they would operate, they would go to cover all belligerent property while passing between a belligerent and a neutral country; since the risk of capture would be laid alternately on the consignor or consignee, as the neutral factor should happen to stand in one or other of these relations.' A contrary doctrine has been held by the courts of the State of New York, but as the decisions of State courts are not of authority in questions of prize, the rule, as decided by Justice Story, must be regarded as established in the United States.1 § 7. This rule is not confined to cases where the contract and shipment are made in time of actual war. If they are made made in time of peace, but in contemplation of war, and with in contem- the manifest intention of protecting the property from hostile war capture, they are equally a fraud upon the belligerent power to which the right of capture belongs; and the reasons for the rule of the prize courts, in cases of contract made in time of actual war, given by Sir William Scott and Justice Story, in their decisions, and by Chancellor Kent, in his commen 1 Kent, Com. on Am. Law, vol. i. pp. 86, 87; the 'Ann Green,' I Gallis R., 291; the 'Francis,' 1 Gallis R., 450; Ludlow v. Browne, Johns. R., 1; De Wolf v. N.Y. Ins. Co., 20 Johns. R., 214; the 'Venus,' 8 Cranch., 253, 275; the Merrimack,' 8 Cranch., 317, 327; the 'Mary and Susan,' I Wheaton R., 25; the 'San José Indiano,' I Wheaton R., 208, 212; the Francis,' 8 Cranch., 183; Ilsley v. Stubbs, 9 Mass. R., 65; Chandler v. Sprague, 5 Met. R., 3c6. taries, are equally applicable to contracts made in time of peace, but in contemplation of war. We do not, however, find any decision directly on this point; but the view of this question taken by Mr. Duer seems to be fully sustained by the reasoning of the courts in the cases to which reference is made in the foregoing paragraph. If goods contracted for, and shipped in time of actual war, are liable to capture on the ground of fraud upon the rights of a belligerent, assuredly the same would, for the same reason, apply to the same transactions made with the same intention, in contemplation of war.1 peace and § 8. And if the contract is made during a peace, and not Contract in contemplation of war, but the shipment be made after made in hostilities have commenced, and with a knowledge of the shipment war, the private agreement of the parties, by which the neutral in war consignor assumes the risk of delivery, will not be permitted to affect the rights of the capturing belligerent. For it was the duty of the consignor, and within his power in this case, equally as in the former, to guard himself from a contingent loss arising from capture, by requiring a proper security from the consignee. Without such security, he was not bound to make the shipment at all, since, as the contract was not made in expectation of a war, so material a change in its risks, as contemplated by the parties in making the contract, would absolve him from its execution.2 time of § 9. But where the shipment of the goods, as well as the If both be contract, laying the risk on the neutral consignor, are both made in made in time of peace, and not in contemplation of war, the peace legal ownership which was in the consignor, at the inception of the voyage, remains in him until its termination. The property of the consignor is not divested in favour of a belligerent, by the breaking out of the war, before the arrival of the goods, by which the foreign consignee becomes an enemy. The same rule applies where the consignor, at whose risk the shipment was made, is a subject of the belligerent captor, the reason of the exemption being equally applicable to his case. Again, if the contract and shipment be made in time of peace, and not in contemplation of war, and the risk be laid on the 1 Duer, On Insurance, vol. i. p. 478. ' Wildman, Int. Law, vol. ii. p. 99; the 'Packet de Bilboa,' 2 Rob., 133: Shipment at risk of neutral consignee, the property being in the consignee, not only by the rules of the civil and common law, but also by the law of nations, the goods are exempt from capture. So, also, if the consignee be a subject of the belligerent captor, for the delivery to the carrier is regarded as the delivery to the consignee, and the goods are neither enemy's goods, nor goods in unlawful trade with the enemy. Both the contract and shipment were lawfully made, and no rule of war being violated by the subject in acquiring the ownership of the property, or in their removal from the country, then friendly but now hostile, the character of the goods is not changed during the voyage, and they are, therefore, not liable to condemnation.' § 10. And, again, where the goods are shipped by an neutral enemy consignor, during the war, and under a prior sale, or consignee an unconditional contract of sale, the property so shipped vests absolutely in the neutral consignee, by delivery to the master, and, if otherwise innocent, and the title remains unchanged, it is exempted from capture during the voyage. The reason is obvious: the neutral violates no duties toward one belligerent by trade, otherwise lawful, with the opposing belligerent; and the only question is that of ownership, which, by the supposition, is in the neutral consignee. But, as a neutral cover is the common device by which belligerent interests are sought to be protected, shipments of this character are watched with peculiar jealousy, and the clearest evidence of ownership in the consignee is not unreasonably required. It is not sufficient,' says Mr. Duer, 'to establish the title, that the bills of lading and the invoice are in the name of the consignee, and express the shipment to be made on his account and risk; for these documents are indispensable to give even the appearance of neutral ownership. It must be shown by what means the title was acquired. If it is alleged that the goods had been paid for, the payment must be proved. If the goods are claimed under a contract of sale, containing provisions for future payment, or under an order for their shipment, the contract, or order, must be produced, and must appear to be absolute and unconditional, so as to bind the consignee positively to the acceptance of the goods, and to take from the consignor any right or power 'Wildman, Int. Law, vol. ii. pp. 99, 100; the Atlas,' 3 Rob., 299. to reclaim them (unless in the sole event of the insolvency of the consignee) previous to their arrival. If any election is given to the consignee, or any power of direction or control is retained by the consignor, the goods continue, in the judgment of law, the property of the consignor, and, as such, are liable to capture during the voyage. This doctrine has been clearly established in the British Courts of Admiralty, and affirmed by the Supreme Court of the United States. It may be well to illustrate this doctrine by particular cases. Thus, where an American merchant had ordered certain goods from Holland, then at war with England, and the Dutch merchant, instead of sending the goods to him directly, shipped them on his own account to a third person, and directed his correspondent not to deliver over the bill of lading unless payment was provided for in a satisfactory manner, it was held that the goods, which were captured on the voyage, remain the property of the consignor, and as such were liable to condemnation. So, where the goods were shipped under a positive order from the claimant, but the shippers, with a view to their own security, had the bill of lading altered so as to be transferable to their own order, Sir William Scott held that the goods, being still under the dominion of the shipper, and subject to his control, the ownership was not legally changed, and upon this ground condemned the cargo as the property of the enemy shipper.' become an § II. The same considerations apply where the shipment If neutral is made in time of peace by a neutral consignor who becomes consignor an enemy before the completion of the voyage, although enemy during there does not, perhaps, exist the same grounds of suspicion voyage as when the consignor is an enemy at the time of shipment. Nevertheless, the courts, even in this case, require the clearest evidence of neutral ownership. This is illustrated by the case of the Francis.' 2 Shortly previous to the breaking out of the war between Great Britain and the United States, in 1812, a merchant in Glasgow shipped several bales of goods to certain merchants in New York, and both the bill of lading and the invoice were in the names of the latter, and expressed 1 Duer, On Insurance, vol. i. pp. 427, 428; the 'Aurora,' 4 Rob., 219; the 'Noydt Gedacht,' 2 Rob., 13, note; the Josephine,' 4 Rob., 25; the 'Carolina,' 1 Rob., 304; the 'Merrimack,' 8 Cranch., 328; the 'Venus,' 8 Cranch., 275. 28 Cranch., 354. Acceptance in transitu the shipment to be on their account and risk. It appeared, however, by a letter found on board, that the consignor, in making the shipment, had exceeded the order, so that the consignees were in effect released from any obligation to accept the goods, and by this letter he gave them an election to take the whole of the shipment, or none, as they pleased. The goods were captured on the voyage, after war had been declared, by an American privateer, and were condemned as enemy's property. In another case of the same kind, during the same war, the bill of lading expressed the goods to be shipped by a house in Liverpool, unto and on account of certain merchants in New York, and the invoice, signed by a manufacturer in Manchester, described the goods to be consigned to the claimants, but did not specify on whose account and risk. And in a letter to the consignees enclosing the invoice, he said 'the goods are to be sold on joint account, or on mine alone.' The goods were accordingly condemned as the property of the shipper. § 12. Where goods are shipped by an enemy consignor to a neutral consignee, not under a prior order, but with the by neutral expectation that they will be received on the terms proposed, consignee if they are in fact accepted by the consignee previous to the capture, it was held, by Sir William Scott, that his acceptance vests and perfects his title, and that, upon proof of the fact, the property will be restored. To exempt the property from capture, however, the acceptance must be absolute and unconditional. The transaction is then construed in the same manner as if the goods had been originally shipped on his account and at his risk. The same point had previously been raised in the Supreme Court of the United States, but as the acceptance in the case decided was partial and conditional, the Court expressly declined to consider what would have been the effect had the acceptance been absolute.' by stop page in transitu Change of § 13. Every consignor, not only at common law, but by a ownership rule of the general mercantile law, has, in certain cases, a control over the shipment, which is technically called a right of stoppage in transitu; that is, a right to countermand the bill of lading, and repossess himself of the goods, at any time after their shipment and before their arrival at their destined 1 Kent, Com. on Am. Law, vol. i. p. 87; the 'Cousine Marianne,' 1 Edw. Rep., p. 346. |