The New York Supreme Court declined to follow the decision of the English House of Lords in the Continental Tyre & Rubber case and held that a New Jersey corporation, a large majority of the shares of which were owned by a German corporation and a German subject resident in Germany, was an entity separate and distinct from its stockholders and was therefore entitled to maintain an action. After reviewing the American cases at length the court reached the conclusion that the decisions were practically unanimous in regarding a corporation as a thing apart from its corporators and that the rule laid down by the House of Lords was not in accord with American precedents. Therefore, a corporation, created under the laws of any one of the States could not be deprived of access to the courts for the protection of its legal rights, notwithstanding the fact that a large majority of the individual stockholders were enemy subjects resident in enemy territory.65

In a suit brought by German subjects resident in Germany to recover money due them by an American firm, before the declaration of war, however, a United States District Court directed the proceedings to be suspended rather than dismissed, until the restoration of peace.66

A motion to dismiss a complaint filed by a resident enemy or to stay proceedings was denied by the Supreme Court of New York. There was nothing in the Trading with the Enemy Act, said the Court, which was applicable to the case and there was no evidence that it was the intention of Congress or the President to deny to the plaintiff the exercise of the same civil rights enjoyed by neutral aliens. The Court added:

With only a few exceptions the nations of all the earth both advocate and practice many ameliorations of the acerbities of war. In that endeavor this nation is not backward. No limitation is peaceful pursuit of their lives and occupations and be accorded the consideration due all peaceful and law-abiding persons, except so far as restrictions may be necessary for their own protection and for the safety of the United States. To shut the door of the court in the face of an alien enemy resident here would be a distinct violation of not only the spirit but the letter of this proclamation." 65 Fritz Schultz, Jr., v. Raimes & Co. (1917) 166 N. Y. supp. 567. The leading Federal case upon which the court relied was Bank of U. S. v. Deveaux, 5 Cranch U. S. 61.

66 Plettenberg, Holthaus & Company, v. Kalmon & Company, 241 Fed. Rep. 605.

placed upon the freedom of resident subjects of a foreign State with which we are at war, unless that limitation is deemed necessary to withhold from that enemy the aid or comfort which may advance his cause. Mere technical or arbitrary rules are neither enacted, nor, when found in ancient usage, enforced. How could our own plans be served or those of Germany defeated or impaired by closing against the plaintiff the doors of our courts? While I should be inclined to hold that the plaintiff is entitled to maintain her action. on the ground that within the purview of the Trading with the Enemy Act she is not an alien enemy engaged in trade subject to suspension by the Federal Government, I prefer to deny the motion. on the broad ground that the resident subjects of an enemy nation are entitled to invoke the process of our courts so long as they are guilty of no act inconsistent with the temporary allegiance which they hold for this Government.67

There is a large amount of American case law relative to the right of enemy aliens to sue and this may be briefly summarized as follows:68 An enemy subject cannot bring an action in an American court during the continuance of war nor prosecute one instituted before its commencement, but this disability applies only to a non-resident enemy and not to those who are permitted to enter or remain in the United States during the war. "A lawful residence implies protection and a capacity to sue and be sued. Some state courts have held that where an action has been commenced before the outbreak of war the proceedings are only suspended, whereas a suit commenced after the outbreak of war will be dismissed; others have held that where the plaintiffs become enemy aliens subsequent to the institution of the suit the action should be dismissed without prejudice. The American courts have uniformly held that enemy aliens may be made defendants at the instance of American citizens who are seek

67 Arndt-Ober v. Metropolitan Opera Co., 58 N. Y. Law Jour. 1347 (1918). See also the case of Speidel v. N. Barstow Co., 243 N. Y., 621 (1917).

68 This summary is made mainly from an article entitled "Alien Enemies as Litigants," published in Case and Comment for June, 1917, pp. 93 ff. This article appears to contain an exhaustive examination of the cases decided by the American courts. See also Borchard, Right of Alien Enemies to Sue, Yale Law Journal, 27:105; Huberich, On Trading with the Enemy, pp. 188 ff., and 194 ff., and Mitchell, in the Maine Law Review, November, 1917.

69 Clarke v. Morey, 10 Johns, 69 (1813); and Norddeutsche Ins. Co. v. Dudley, N. Y. Law Jour., January 11, 1918.

ing to protect their property and enforce their rights but where an enemy alien is sued he is entitled to appear by attorney and be heard in his defense.70 But a non-resident enemy alien cannot prosecute a counter claim."

71

FRENCH LAW AND PRACTICE.

Early Opinion and Practice.-As to the right of enemy subjects to sue either as plaintiffs or defendants in the courts of France there appears to have been little judicial authority or positive legislation prior to the recent war. There was, however, a decision of the parlement of Douai in 1704 to the effect that a subject of an enemy power could not sue a subject of the King of France, when the latter had by decrees prohibited all relations between his subjects and those of the enemy country. There also appears to have been an "act of government” in 1803 and a decision of the Court of Cassation in 1806 affirming this principle.72

French Legislation of 1914 and 1915.-During the recent war no legislation expressly denying the right to sue was enacted by the French parliament or proclaimed by decree of the government, but those who adopt the view that the right to sue does not exist, either rely upon the legislation and jurisprudence of the first Empire, referred to above, which they say has never been repealed, or upon the terms of the decree of September 27, 1914, prohibiting commercial relations with the enemy and the act of parliament of April 4, 1915, which prescribes penalties for violation of the decree. Article 2 of the decree referred to declared null and void as being contrary to public policy (l'ordre public), every act or contract performed or entered into either in French territory or in a French protectorate,

70 As was pointed out above this rule was adopted by the United States Supreme Court in the case of McVeigh v. the United States, 11 Wall. 259 (1870), and it has been followed by the State courts in many cases. See the cases cited in an article in 3 Va. Law Register, 1917, p. 102, n. 45.

71 This was also the decision of the King's Bench Division in the case of Robinson v. Continental Ins. Co., 31 Times Law Reports 20 (1915) referred to above.

72 On the French practice and doctrine, see two valuable articles by Professor Jules Valéry, of Montpellier, in the Rev. Gén, de Droit Int. Pub., 1916, pp. 379 ff. and in Clunet's Journal de Droit Int. Privé, 1915, pp. 1009 ff.

with subjects of the German or Austro-Hungarian Empires or with persons residing therein. Article 3 prohibited and declared to be null as contrary to public policy, the execution for the benefit of the subjects of the said empires or persons residing therein, of pecuniary or other obligations resulting from every act or contract done or entered into in French territory by every person prior to August 4, in the case of German subjects and prior to August 13 in case of AustroHungarian subjects. By a decree of November 7, 1915, the terms of the decree of September 27 were extended to apply to relations with the subjects of Bulgaria and persons residing therein.

Denial of the Right to Sue.-The above-mentioned prohibition in respect to contracts with enemy subjects, it was argued by the adversaries of the right to sue, applied not only to relations of a pecuniary or commercial character but also to civil contracts and relations such as are necessarily implied in judicial proceedings between Frenchmen and enemy subjects. It followed therefore that enemy subjects were prohibited from instituting or prosecuting actions in the courts of France. This was the view adopted by a number of French jurists73 and by the French courts in several cases one of the most reactionary decisions in which the right to sue was denied

73 For example by Professor Valéry in the articles cited above; by M. Reulos, Manuel des Séquestres, p. 12, n. 1, and p. 214; by M. Courtois, in Clunet's Journal, T. 42, p. 509; by M. Troimaux, Séquestres et Séquestrés, pp. 163 ff., and by M. Théry in Clunet, T. 44, pp. 480 ff. Professor Valéry affirms that the judicial disability of enemy aliens was a rule of the Roman law and is equally the established doctrine of French public law. Rousseau's theory that war is a contest merely between armed forces, may, he says, have been true before 1914, but the refusal of the Germans to act in harmony with it destroyed whatever force it had acquired. He quotes Portalis and Leuder (Holtzendorff's Handbuch, IV, p. 358) in support of the view which he maintains. Valéry, however, appears to have admitted that an enemy subject might defend an action against him.

74 Among the French courts which refused to admit enemy aliens to sue were the tribunal of Marseilles (June 22, 1915); the tribunal of Commerce of Marseilles (January 5, 1917); of Phillippeville (April 15, 1915) and the tribunal of the Seine (référé) May 18, 1916. Nevertheless sequestrators of enemy property could sue for the purpose of protecting the property in their custody. Actions by French creditors for the recovery of debts against sequestrated property could also be brought against the sequestrator, in which case the latter could defend the action.

was that of May 18, 1916, by President Monier of the Tribunal of the Seine (référé) 75 who interpreted the prohibition in the decree of September 27 in respect to actes and contrats with enemy subjects to embrace "judicial" acts such as are involved in retaining counsel and bringing actions in the courts.

Adverting to the contention that under Article 23 (h) of the fourth Hague Convention of 1907 enemy subjects are entitled to sue in the courts of France, M. Monier asserted that "an international convention cannot prevail against a subsequently enacted municipal law which modifies its provisions and respect for which is rigorously imposed on every inhabitant of French territory," 76 the "speculative theories of the law of nations" to the contrary notwithstanding. Furthermore, the above-mentioned provision of the Hague Convention was not binding on France because it had been violated by the German decree of August 7, 1914, which excluded French subjects from suing in the courts of Germany." Not only this, but M. Monier added, the Germans had "cynically and deliberately violated all the rules imposed on belligerents by the various conventions of the Hague'; consequently the subjects of Germany were not entitled to the benefit of the law of nations in general and of the Hague Conventions in particular.78 Every reason and consideration of law and fact, he concluded, was opposed to opening the courts to Germans; such liberty was in flagrant contradiction with the tendencies of opinion; it would lead in practice to serious inconveniences, possible collusions and fraud and even irreparable injury to the country.

75 The case of Wilmoth, Sequestrator v. Daude, Text in Phily, Jurisprudence Speciale et Législation de la Guerre, Pt. III, pp. 225 ff., also in Clunet, T. 43, pp. 1303 ff.; see also the case of Wilmoth, Sequestrator, v. Société Gén. Immobiliére, December 21, 1915. Text in Reulos, pp. 355 ff.

76 Professor Barthélemy (43 Clunet, 1484) remarks that this doctrine is "calculated to move the hearts of international publicists." M. Barthélemy properly adds that international conventions which have been ratified by France are binding upon all French judges.

77 But as M. Barthélemy remarks the German prohibition applied only to French citizens domiciled outside the Empire and not at all to those resident therein. See also 42 Clunet, 567, and 43 Clunet, p. 1131, on this point.

78 Compare on this point the more liberal views of Judge Cator, of the British prize court at Alexandria in the case of the Gutenfels, quoted above.