with a hostile character regardless of that of the owners, obviously no different rule should be applied than that followed when title is not in a corporation.1

$795. The Same.

A more difficult situation presents itself in the case where the principal reason for impressing a hostile character on a cargo is the bare connection between the corporate owner and the enemy or its territory. Inasmuch as the impress of such a character serves to subject the property to condemnation in case of capture, utmost care is required in order to establish justly the ground of the fatal connection. The practice which heeds the commercial domicile of an individual regardless of his legal home in determining the condemnability of his goods offers guidance. It illustrates the practicability and hence the reasonableness of disregarding a man's actual domicile (as the term is understood at common law as interpreted by American as well as British courts) which is a legal condition attached to him irrespective of his will, if he has in fact established by his residence and commercial activities within enemy territory a definite and intimate relationship therewith. That he may do so is consistent with his retention of a legal home elsewhere, and, therefore, renders irrelevant inquiry respecting either the place of his actual domicile or the legal effect of it.

Between a neutral corporation and a belligerent State varying degrees of intimacy may exist. Within the territory of the latter all or most of the shareholders may reside; business may there be transacted through a local branch or other agencies; the corporation may even establish its center of administrative control within the hostile domain. In ascertaining the effect of any of these relationships upon the national character generally of corporate property encountered at sea, it seems unnecessary to make inquiry

1 See Effect of Certain Relationships between Property and Belligerent Territory, supra, § 791.

2 Where the impressment of hostile character does not expose the property to condemnation, but merely results in causing seizure and retention during the period of war, as in the case of private property on land, there is less danger of an abuse of power.

3 See Belligerent Domicile, Effect of Relationship between the Owner of Property and Belligerent Territory, supra, §§ 789-790.

When a man goes to a place with the requisite intention, his acquisition of a domicile there is due to the fact that the law imposes it upon him. That consequence may be and oftentimes is sharply at variance with the desires of the individual. Instances are numerous where a person struggles vainly to defeat the operations of the law. See, in this connection, In re Steer, 3 H. & N. 594.

respecting the correct theory of determining the domicile of the corporation;1 for the legal connection (however great or little significance be attached to it) between the neutral State of incorporation and the entity which it has created or clothed with power, appears to have no bearing upon the question of fact respecting the degree of intimacy or the nature of the relationship actually established between the corporation and the belligerent State. Upon the solution of that question should depend in each case the liability to condemnation of the goods involved.

§ 796. The Same.

If the center of administrative control is within enemy territory, that circumstance manifests the existence of a relationship between the corporation and the belligerent State, which doubtless suffices to stamp property of the former with hostile character.2 If the sole connection between the corporation and the enemy is the transaction of business within its domain through a branch house there situated, the relationship would probably not be deemed to taint with a hostile character goods other than those connected with the local branch. In such case the circumstance that the corporation was not only incorporated, but also chiefly administered and controlled in non-belligerent territory would seem to prevent such a consequence. If the connection between the corporation and a belligerent is manifested solely by the ownership of the

3

For an illuminating discussion of that question see E. Hilton Young, "The Nationality of a Juristic Person", Harv. L. Rev., XXII, 1; also bibliography in comments, Yale L. J., XXVII, 108, 109, note 1.

2 Such appears to be the trend of British opinion. Daimler Co., Ltd. v. Continental Tyre & Rubber Co., Ltd. [1916], 2 A. C. 307, in which Lord Parker declared (id., 339): "It would seem, therefore, logically to follow, that, in transferring the application of the rule against trading with the enemy from natural to artificial persons, something more than the mere place or country of registration or incorporation must be looked at. My Lords, I think that the analogy is to be found in control, an idea which, if not very familiar in law, is of capital importance and is very well understood in commerce and finance. The acts of a company's organs, its directors, managers, secretary, and so forth, functioning within the scope of their authority, are the company's acts and may invest it definitely with enemy character.'

See, also, Dr. E. J. Schuster, "The Nationality and Domicil of Trading Corporations", Proceedings, Grotius Society, II, 57, 79; C. M. Picciotto, "Alien Enemy Persons, Firms, and Corporations in English Law", Yale L. J., XXVII, 167, 175-178; comment in Yale L. J., XXVII, 108-113; note in Law Quar. Rev., XXXII, 340; notes in Harv. L. Rev., XXVIII, 629, and XXX, 83.

Compare view of Lord Reading in Continental Tyre & Rubber Co., Ltd. v. Daimler Co., Ltd. [1915], 1 K. B. 893.

The situation in such case would appear to be like that of an unincorporated commercial house having a branch in enemy territory, yet having its principal business in neutral territory.

stock of the former by persons residing within the domain of the latter, a more difficult problem arises. In such a situation the domicile of the corporation is not to be regarded as a hostile one.1 Even if that fact is immaterial in determining the national character of the property concerned, it must be apparent that great practical difficulty necessarily attends the effort to make liability to condemnation dependent upon the hostile place of ownership, especially where numerous shares are held by persons inhabiting friendly territory. It is possible also that in such case the center of administrative control may be in a non-belligerent country. If, however, the entire stock is held in enemy territory, it is probable that the practical control as well as the beneficial interest is lodged therein.2 In such case it is believed that condemnation of the corporate property as having an enemy character would indicate no abuse of a belligerent right.3

It should be observed that the practice of nations has not thus far brought into being any rule of general acceptation which forbids a belligerent to disregard the nationality or the domicile of a corporation in determining the national character of property belonging to it. Although neither may be observed as the test of the propriety of condemning corporate property, it does not follow that in the converse situation where a corporation has a hostile nationality and (according to the prevailing American theory) a hostile domicile, its property is ever to be regarded as lacking an enemy character. It is not deemed to be an unjust rule which, at least for purposes of condemnation, stamps the beneficial interests of all shareholders with the nationality of the belligerent State which gave life to the corporation and endowed it with necessary functions.

On principle belligerent States should adopt a single theory of determining the hostile character of corporate property, and consistently refuse to invoke any other in support of condemnation.*

1 See, in this connection, E. Hilton Young, "The Nationality of a Juristic Person", Harv. L. Rev., XXII, 1, 2–7.

2 Practically the same situation arises where substantially all of the stock is held in enemy territory and a nominal number of shares are owned by officers living within non-hostile territory.

See The Roumanian, 1 Lloyd's Prize Cases, 191.

3 See, in this connection, the views of the Earl of Halsbury in Daimler Co., Ltd. v. Continental Tyre & Rubber Co. [1916], 2 A. C. 307, 315-317.

It is submitted that events of The World War have shown the futility of reliance upon either the nationality or the domicile (in the sense attributed to that term in the common law cases) of the owner, whether an individual or corporation, as an exclusive test of national character. One result of that conflict seems to have been the growth of a tendency to disregard both fictions

Until there is general agreement as to the theory to be followed, it is to be anticipated that captors will always demand condemnation when the corporate owner is either of hostile nationality, or so connected with the enemy as to warrant the conclusion that within its territory is to be found the real center of corporate administrative control. Moreover, in making such demands before the prize courts of a single State, on both or either of these grounds, it will be urged with force that so long as the practice of nations has not fixed the test to be applied, a belligerent is not compelled to abide by any one.

and legal structures as the basis of the right of condemnation of property, and to endeavor to get to the root of the matter by close observation of the actual relationship existing between the owner and the territory of the enemy. It is believed that the theory of commercial domicile, however unfortunate in a descriptive sense, serves at least as a guide in the right direction. In any attempt to formulate a basis of general international agreement, it would seem wise to shun the use of terms which are either misunderstood or looked upon with distrust, and to lay down no rule which does not clearly and simply ascribe to the realities of intimate associations between the corporate owners of property and enemy territory their true significance.

At the time when the United States declared its independence the experience of nations had developed a practice which, on the one hand, acknowledged the right of a belligerent to seize on the high seas property even of neutral ownership and found on board vessels of whatsoever national character, if destined to the enemy and calculated to aid its operations, and which, on the other, restrained a belligerent in determining under what circumstances property might be justly regarded as bearing such a relation to the enemy. It was the nature of the restraint as well as the scope of the right which it became the task of American statesmen to clarify. The significant fact is that long before the close of the eighteenth century there was an understanding, apparent in England as well as continental Europe, that a belligerent was not free to cut off generally neutral commerce with enemy territory. Such a situation was in sharp contrast to that which had once prevailed, when no State engaged in war hesitated to regard as hostile to itself, and therefore as subject to restraint, the ships or goods of any foreign merchant who ventured to trade with the enemy.1 The reasons which had gradually compelled some measure of respect for the neutral claim may have been various. Possibly the most influential were the increasing inability of a belligerent to win respect for its pretensions, and the danger to itself involved in the attempt to enforce them.

In attempting to restrict neutral commerce, belligerents from an early date resorted to the practice of announcing lists of articles

1 T. A. Walker, Hist. Law of Nations, I, 136, quoted in H. R. Pyke, Law of Contraband of War, 30. See, also, E. Nys, Les Origines du Droit International, 226-228; Westlake, 2 ed., II, 198; J. B. Moore," Contraband of War", Philadelphia, 1912, Proceedings, Am. Philosophical Society, LI, No. 203, 39. Concerning the practice of England during the sixteenth century, see Edward P. Cheyney, History of England from the Defeat of the Armada to the Death of Elizabeth, Philadelphia, 1914, I, chap. xxii, and documents there cited.