Daimler Co., Ltd. v. Continental Tyre and Rubber Co. (G.B.), Ltd.[1916-17] All ER Rep. 191

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EARL OF HALSBURY – I am of opinion that this judgment should be reversed. In my
opinion, the whole discussion is solved by a very simple proposition that in our law when the
object to be obtained is unlawful the indirectness of the means by which it is to be obtained
will not get rid of the unlawfulness, and in this cause the object of the means adopted is to
enable thousands of pounds to be paid to the King’s enemies.
Before war existed between Great Britain and Germany, an associated body of Germans
availed themselves of our English law to carry on a business for manufacturing motor car
tyres in Germany and selling them here in England and elsewhere, as they were entitled to do,
but in doing so were bound to observe the directions which the Act of Parliament under
which they were incorporated required. They were entitled to receive in the shape of
dividends the profits of the concern in proportion to their shares in it. They were all Germans
originally, though one afterwards became a naturalized Englishman. Now the right and proper
course to deal in the matter-and I have no reason to suppose that any other course was
followed – was to distribute to them rateably, according to their shares, the profits of their
adventure. But this machinery, while perfectly lawful in peace time, becomes absolutely
unlawful when the German traders are at war with this country. I confess it seems to me that
the question becomes very plain when one applies the language of the law to the condition of
things when war is declared, between the German who is in the character of shareholder and
in control of the company. They can neither meet here nor can they authorize any agent to
meet on any company business. They can neither trade with us nor can any British subject
trade with them. Nor can they comply with the provisions for the government of the company
which they were bound by their incorporated character to observe.
Under these circumstances it becomes material to consider what is this thing which is
described as a “corporation.” It is, in fact, a partnership in all that constitutes a partnership
except the names, and in some respects the position, of those who I shall call the managing
partners. No one can doubt that the names and the incorporation were but the machinery by
which the purpose (giving moneys to the enemy) would be accomplished. The absence of the
authority to issue the writ is only a part of the larger question. No one has authority to issue a
writ on behalf of an alien enemy because he has no right himself to sue in the courts of a King
with whom his own Sovereign is at war. No person or any body of persons to whom attaches
the disability of suing under such circumstances can have authority, and to attempt to shield
the fact of giving the enemy the money due to them by the machinery invented for a lawful
purpose would be equivalent to inclosing the gold and attempting to excuse it by alleging that
the bag containing it was of English manufacture. I observe the Lord Chief Justice says that
the company is a live thing. If it were, it would be capable of loyalty and disloyalty. But it is
not; and the argument of its being incapable of being loyal or disloyal is founded on its not
being “a live thing.” Neither is the bag in my illustration “a live thing.” And the mere
machinery to do an illegal act will not purge its illegality-fraus circuitu non purgatur. After
all, this is a question of ingenious words, useful for the purpose for which they were designed,
but wholly incapable of being strained to an illegal purpose. The limited liability was a very

useful introduction into our system, and there was no reason why foreigners should not, while
dealing honestly with us, partake of the benefits of that institution, but it seems to me too
monstrous to suppose that for an unlawful, because, after a declaration of war, a hostile,
purpose the forms of that institution should be used, and enemies of the State, while actually
at war with us, be allowed to continue trading and actually to sue for their profits in trade in
an English court of justice.
There are one or two observations which I think it right to make upon this very singular
performance. This is a joint appeal partly upon a judgment under Ord. 14, partly upon a cause

• Continental Tyre and Rubber Co. (Great Britain), Ltd. v. Thomas Tilling, Ltd. [112 L.T.
  324] tried before Lush, J. With respect to Ord. 14, it is almost ludicrous to treat seriously an
  order made under such circumstances as these, and that observation is sufficiently proved by
  the short history of this litigation. The second observation I have to make is that if this
  question turned only upon the question of the secretary’s authority to issue the writ, I should
  certainly not be contented with the position in which that question was left. In the somewhat
  flippant evidence given by Mr. Wolter, it was stated that the secretary was given authority,
  and a minute recorded of the fact; but in the absence of the learned judge some search was
  made for the minute in question, and no such document could be found. I will say no more,
  since the witness was not again brought before the learned judge, and, therefore, had no
  opportunity of explanation, but I certainly would not act upon evidence such as I have
  described. I am, therefore, of opinion that this appeal should be allowed, and I so move your
  Lordships. I would like to add that I by no means desire to minimize the value of the weighty
  judgements to be delivered by your Lordships, but I have thought it important that all may
  understand the principle that the unlawfulness of trading with the enemy could not be excused
  by the ingenuity of the means adopted.
  LORD ATKINSON – This is an appeal from an order of the Court of Appeal, dated Jan.
  19, 1915, affirming an order of Scrutton, J., dated Nov. 27, 1914, made in an action brought
  in the name of the respondent company (a private company) to recover from the appellant
  company on a specially indorsed writ, dated Oct. 23, 1914, a sum of 5,605 16s., with interest,
  the amount due on three bills of exchange drawn by the former company and accepted by the
  latter. The legal question for decision is whether the order appealed from, made upon
  additional evidence not before the master or Scrutton, J., is right. I, therefore, abstain from
  considering whether, in the events which have happened, this appeal is now necessary for the
  protection of the appellant company.
  On Oct. 30, 1914, the respondents issued a summons pursuant to R.S.C., Ord. 14, for
  leave to sign final judgment in the action. Affidavits were filed on behalf of both the parties
  litigant respectively in support of and in opposition to the respondents’ application. Master
  Macdonell, upon the affidavits and the documents made exhibits by them, made an order of
  Nov. 24, 1914, granting the leave asked for. Presumably the memorandum or articles of
  association of the respondent company were brought before the master and examined by him,
  as they should have been, although this does not appear on the face of the proceedings. On
  appeal from this order by the appellant company, Scrutton, J., presumably on the evidence
  before the master, made the order already mentioned, dismissing the appeal and upholding the

order of the master. An appeal was heard in the Court of Appeal, together with an appeal
raising somewhat the same questions arising out of an action brought by the present
respondents against a third company, Thomas Tilling, Ltd. (reported 112 L.T. 324), tried
before Lush, J., without a jury. It does not appear from the appendix what were the particular
issues raised in that action, but it certainly would appear that not only was the evidence given
in it by one of the plaintiffs’ witnesses, the secretary, referred to and relied upon by the lords
justices in the appeal in the present case, but the findings of the learned judge at the trial were
apparently also relied upon against the present appellants as if they had been parties to the suit
in which those rulings were made. The evidence of the secretary was, however, much relied
on by both sides in argument before your Lordships. Strange as it may appear, the minute
book of the company, showing presumably from what centre the business of the company was
managed and directed, was not given in evidence before any one of the three tribunals. The
embarrassing and, as I think, rather unfortunate result of this omission is, that the full facts,
showing in what country-England or Germany-lay the real business centre from which the
governing and directing minds of the company or its directors operated, regulating and
controlling its important affairs, were, save so far as revealed in the evidence of its secretary,
never disclosed. These are, however, the very things which, for the purpose of income tax at
all events, have been held to determine the place of residence of a company like the
respondent company, so far as such a fictitious legal entity can have a residence: De Beers
Consolidated Mines, Ltd. v. Howe. And I can see no reason why for the purpose of deciding
whether the carrying on by such a company of its trade or business does or does not amount
to a trading with the enemy they should not equally determine its place of residence. It is well
established that trading with the most loyal British subject, if he be resident in Germany,
would, during the present war, amount to trading with the enemy, and be a misdemeanour if
carried on without the consent of the Crown, the reason being that thereby he might furnish
resources against his own country: M’Connell v. Hector. The same principle would
presumably apply to a trading company resident in an enemy country. It would certainly
appear to me, therefore, that, having regard to the issue raised in this suit, the residence of the
respondent company was of necessity a vital matter for consideration. During the argument a
passage was read out from the shorthand writer’s notes of the argument before the Court of
Appeal, from which it appeared that the leading counsel for the Daimler Co., Ltd., admitted
that the residence of the respondent company was in England. He could not well do
otherwise, since the company was registered and incorporated in England, and all the facts
going to show where it really resided were, with the exception already mentioned, shut out
from the view of the court. It by no means follows, however, that, despite that admission of
counsel, your Lordships could not, if sufficient facts were disclosed in evidence before you,
hold that the residence of the company was not in England, but, in truth, in Germany.
In Crump v. Cavendish, Thesiger, L.J., dealing with the above-mentioned Ord. 14, said:
“He [the judge] has to form an opinion on the facts before him, and is to stay his
hand only if he is satisfies that the defendant has a good defence upon the merits, or
thinks the facts disclosed by the defendant sufficient to entitle him to be permitted to
defend the action.”

I turn to the affidavits and documents before the master and Scrutton, J., to consider
whether the facts therein disclosed were sufficient to entitle the appellant company within this
rule to be permitted to defend the action brought against them. What are those facts ? They
are (i) that the 25,000 shares into which the capital of the respondent company is divided are
held by five individuals and a joint stock company called the parent company; that this
company, incorporated and resident in Hanover, holds 23,398 of these shares, that the three
individuals who hold between them 1,600 shares are all German subjects resident in Hanover;
that the two remaining shares are held, one by the secretary, Hans Frederick Wolter, and one
by the managing director, Paul Scharnhost Brodtmann, both according to the list of
shareholders having residences in England; (ii) that the directors, three in number, excluding
the managing director, are also German subjects resident in Hanover; (iii) that, with the
exception of the secretary, all the directors and shareholders are German subjects; that the
secretary is also a German, but, unlike the others, took out naturalization papers on Jan. 1,
1910; (iv) that the appellant company were ready and willing to pay the amount sued for on
two conditions-first, that in doing so they were not acting in contravention of the provisions
of the Trading with the Enemy Act, 1914 and, second, that the respondent company were able
to institute this action and also were entitled to give a good and valid discharge for the amount
claimed; (v) that it is averred that the so-called parent company controlled the respondent
company; that the former and all the officers of the latter are alien enemies, that alien enemies
who were officers or agents of the company were incapable of acting either in the name of, or
on behalf of , the company, or individually; that the appellant company were advised and
believed that the respondent company were incapable of instituting proceedings or giving
receipts for sums due to them, or doing any of those acts which must be done through agents
or officers, unless and until agents and officers who were not alien enemies have been
appointed; that for these reasons the proceedings were wrongly instituted, and that
unconditional leave to defend should be given.
The affidavit making these averments distinctly challenged the right of the respondent
company, or any of its officers acting on its behalf, to institute the present action, or to give a
valid discharge for the amount claimed by it. Their secretary filed an affidavit in reply. He
contented himself with asserting that his company is an “English company, being registered at
Somerset House under the Companies (Consolidation) Act, 1908, and that he himself is a
British subject, having been naturalized on Jan. 1, 1910.” He adds lengthy paragraphs relative
to his dealings with the Committee on Trade, with sales made to the War Office, with the
payments made to his company by some others of its creditors, but not a word as to the place
where its important business was conducted, or from which its action was directed by its
governing minds, and not a syllable as to his ever having been authorized by the directors, or
any of them, or any person connected with the company, to institute actions of any kind on its
behalf. This, if ever, was the time for him to have disclosed the fact that he was clothed with
authority to bring this action, if the fact were so. In my view, his silence, on the assumption
that he had the authority, is inexplicable. It was greatly pressed in argument that Lush, J., had,
in the action tried before him, come to the conclusion that the secretary was a truthful, though
a forgetful and inaccurate, witness, and also that he had authority to institute the suit against
Thomas Tilling, Ltd. I have the utmost confidence in any conclusion at which that learned
judge would arrive on the evidence given before him. These affidavits were, as I understand,

not before him, and it is, in my view, quite unjust to press against the appellant company the
conclusions arrived at by Lush, J., without the light which this unaccountable reticence
throws on the secretary’s character and veracity.
[His Lordship considered the articles of association of the respondent company and the
evidence, and said that there was not a scrap of writing of any kind given in evidence to prove
that any power to institute actions or give receipts for money recovered was ever conferred
upon the secretary of the company. The only document he referred to as conferring it upon
him contradicted every statement made by him on the point. It seemed incredible that he ever
was clothed with the power, without consulting his directors or managing directors, to
institute in the name of the company any actions of any kind he pleased. There was no proof
other than his own testimony that he ever instituted any action or gave instructions for its
institution. The burden of proving that the secretary had power and authority to institute the
present action some months after the outbreak of the war rested on the respondent company.
He (His Lordship) was clearly of opinion that they had not discharged that burden.]
Having formed this opinion, I do not desire to express any opinion on the other and main
point raised in the case further than to say that, the question of residence of the company
apart, I do not think that the legal entity the company can be so identified with its
shareholders, or the majority of them, as to make their nationality its nationality or their status
its status, so completely as to make it an alien enemy because they are alien enemies, or to
give it an enemy character because they have that character. I think the judgment of Lord
Macnaghten in Janson v. Dricfontion Consolidated Mines, Ltd is inconsistent with any such
view. Speaking of a Transvaal company, he said:
“If all its members had been subjects of the British Crown the corporation itself
would have been none the less a foreign corporation and none the less in regard to
this country an alien.”
I think it is much to be regretted that the appellant company were not permitted to defend,
as, in my opinion, they should have been, so that all the facts might have been elicited, and it
could be determined whether the company resides and trades in Germany or not. I think the
order suggested by my noble and learned friend Lord Parker should be made.
LORD SHAW – The Daimler company is indebted to the Continental company in certain
sums of money. It was willing to pay these sums if payment could have been made with
safety. The Continental company took legal proceedings to recover the moneys. To these
proceedings the Daimler Company tabled two defences. The first is that payment would be of
the nature of trading with the enemy, and the second is a challenge of the authority to institute
the action. Upon the first point I am of opinion that the judgment of the Court of Appeal is
right. Upon the second point and with regret I am of opinion that it is erroneous.
The first point is of much general importance : it was carefully and anxiously argued. My
views upon it in its general aspect and apart from the statutes and proclamations-which were
the subject of a keen analysis and which are afterwards referred to-may be expressed in the
following propositions. Before stating them, however, may I say that I have found myself to
be in substantial agreement with Lord Parmoor in the judgment about to be pronounced by

him, supported, as in my humble opinion it is, by the authorities which he has cited and which
I do not here repeat. The propositions I have mentioned are these. (i) There is no debate at this
time of day on the general proposition that the direct and immediate consequence of a
declaration of war by or against this country is to make all trading with the enemy illegal. The
proposition was dealt with recently in this House in Horlock v. Beal. War is war, not between
Sovereigns or governments alone. It puts each subject of the one belligerent into the position
of being the legal enemy of each subject of the other belligerent; and all persons bound in
allegiance and loyalty to His Majesty are consequently and immediately, by the force of the
common law, forbidden to trade with the enemy Power or its subjects. (ii) This obligation and
restraint is binding in every sense. It is therefore, no defence to a breach of the duty to forbear
from trading with the enemy that the act was done, not for personal benefit or advantage, but
in the service or under the agency or orders of another who is not so bound. No one subject to
the laws of this country could be permitted to escape from obedience thereto by pleading that
he was acting merely as the hand of others, say a German, Austrian, or Turkish company. The
prohibition against trading is binding in regard to all action direct or indirect, personal or
representative. (iii) In so far as the obligation and restraint imposed by the common law are
rested upon the allegiance or loyalty of the subject, the application of such ideas to a limited
company is incongruous; allegiance and loyalty are personal, by the nature of the case. An
incorporated company cannot with propriety have such terms applied to it, as if it were a mind
subject to emotions or passions or a sense of duty. It is a creation of the law convenient for the
purposes of management, of the holding of property, of the association of individuals in
business transactions, in short for all the purposes and with the limitations and remedies set
forth in the Companies Acts. (iv) Once, however, it is clear that, although this may be so
under proposition (iii), yet that under proposition (ii) every individual subject to the common
law is inhibited and interpelled from trading with the enemy, then trading with the enemy on
behalf of a company is just as much prohibited as personal trading. A limited company,
incorporated in England and although English as regards all the results which flow from such
incorporation, is thus completely barred by the Trading with the Enemy Acts-not by reason of
the company’s allegiance or loyalty, but by reason of the fact that there is no human agency
possible within the realm through which, and within the law, trading with the enemy could be
accomplished. In obedience to that law all trading with the enemy, direct or indirect, stops; no
firm or company wheresoever or howsoever directed can so trade, nor can anything be
negotiated or transacted for it through any person or agency in this country. (v) Transactions
and trading require two parties, and the same principle applies to trading by the enemy as to
trading with the enemy. In this way a company registered in Britain may have shareholders
and directors who are alien enemies. Transactions or trading with any one of them become
illegal. They have no power to interfere in any particular with the policy or acts of companies
registered in Britain; alien enemy shareholders cannot vote; alien enemy directors cannot
direct; the rights of all these are in complete suspense during the war. (vi) As to shareholders
or directors who are not alien enemies, they stand pendente bello legally bereft of all their
coadjutors who are. And, if the company be a company registered in Great Britain, they must
face the situation thus created by adopting the courses suitable either under the Companies
Acts or the recent legislation. In this way, while no payments of assets, dividends, or profits
can be made to alien enemy shareholders, yet the property and business of the company may

be conserved. There may be loss consequent on commercial dislocation, but neither loss nor
forfeiture is imposed by the law. The law is completely satisfied if in the conduct and range of
the business trading with the enemy is avoided. To put in a word one plain instance : All
British trading by the company is still permitted if there are British shareholders who can
carry it on. With much respect I see no advantage to be gained, but much confusion to result,
from proceeding to a further stage and treating or even characterizing British registered
companies as either alien enemies or companies with an alien enemy character. As stated, all
the enemy shareholders rights being placed in suspense and all trading with these
shareholders or with any other enemy being interpelled, there is no principle of law which
would in my humble opinion, justify the incongruity of denominating or regarding the
company itself as enemy either in character or in fact.
Much of the discussion at your Lordships’ Bar-probably the major part of it-had reference
to the recent legislation. This was minutely and anxiously analysed. I think it necessary
accordingly to deal with it; but I may say at once that I do not think that it invades or varies
any of the principles which I have humbly ventured to sketch. The question, however, with
whom this trading is forbidden is one of wide and serious importance. So much of the
commerce of the country is now carried on by incorporated companies that it is manifestly
critical for the citizen to know what is the scope of the term “enemy,” and if it can apply to
such companies, and if so to which of them. This is all the more so because the legislation
upon the subject almost at its opening creates trading with the enemy a misdemeanour. The
obligation under the common law is backed by criminal sanction. Once such a statute is
passed it would, of course, not be open to any citizen to plead his ignorance of the law of the
land as a defence against the charge of misdemeanour. This, however, makes it clear that
courts of law should give a strict interpretation to statutory provisions of this character-an
interpretation which in any case of dubiety or ambiguity shall be favourable to the liberty of
the subject. Speaking for myself, I do not find that the Trading with the Enemy Acts and
proclamations now to be considered were such as to leave any substantial doubt in the mind
of the citizen as to what should be his attitude with regard to incorporated companies.
By the Trading with the Enemy Act, 1914 [repealed by Trading with the Enemy Act,
1939] it was provided, s. 1(2):
“For the purposes of this Act a person shall be deemed to have traded with the
enemy if he has entered into any transaction or done any act which was at the time of
such transaction or act prohibited by or under any proclamation by His Majesty
dealing with trading with the enemy for the time being in force or which by common
law or statute constitutes an offence of trading with the enemy : Provided that any
transaction or act permitted by or under any such proclamation shall not be deemed
to be trading with the enemy.”
There was much discussion as to this proviso. It appears to me to be a proviso applicable
to the whole of the sub-section, and, if so, applicable to all transactions or acts of trading
which either by common law or by this or any other statute constitute trading with the enemy.
This, in my view, is equivalent to a statutory declaration that every transaction or act
permitted under proclamation shall, notwithstanding all such common law or statutory
prohibitions not be deemed to be trading with the enemy. I look upon this statute as one for

direction and guidance; and it does not appear to me legitimate to contend that the direction
and guidance were not of this character-that if a thing was permitted by a proclamation it was
not trading with the enemy or a contravention of the law. The statute was dated Sept. 18,
1914; and the question accordingly is: What did the proclamation then in force-namely, that
of date Sept. 9-provide ? It provided, art. 5:
“From and after the date of this proclamation the following prohibitions shall
have effect (save so far as licences may be issued as hereinafter provided), and we do
hereby accordingly warn all persons resident carrying on business or being in our
dominion : (1) Not to pay any sum of money to or for the benefit of an enemy.”
There occurs in art. 3 of the proclamation a definition of enemy. It is as follows:
“The expression ‘enemy’ in this proclamation means any person or body of
persons of whatever nationality resident or carrying on business in the enemy
country, but does not include persons of enemy nationality who are neither resident
nor carrying on business in the enemy country. In the case of incorporated bodies,
enemy character attaches only to those incorporated in an enemy country.”
It appears to me that this was a plain guide and instruction to persons in the position of
the appellants. They were told first that a transaction permitted under the proclamation should
not be deemed trading with the enemy; secondly, that in the case of incorporated bodies
enemy character attached to those incorporated in an enemy country; but, thirdly, that it
attached only to those. I think, in short, that it was very plain intimation that if a company was
not incorporated in an enemy country, but was incorporated in our own country, then this
was, though negatively expressed, the exact case in which a payment to such a company
become unexceptionable and legitimate.
It is not to be forgotten that under the very same statute provisions were enacted to cover
the case of companies whose share capital or directorate was either wholly or in certain
proportion held by alien enemies. By s. 2 (2), for example, in the case of such companies,
when a third or more of the issued share capital or the directorate was so held, the Board of
Trade might obtain authority to inspect the books, &c., and appoint an inspector. By s. 3
further cautionary provisions were made giving to the Board of Trade power to apply to the
court for the appointment of a controller. So that-to carry the legislation no further than the
one Act of Parliament referred to-it was clear that the case of companies held by a majority or
even by a minority of alien enemies was put under surveillance to such an extent that
payments made or transactions carried on with such a company in this country would have
been under official inspection. It appears to me to be a somewhat strong proposition under
these circumstances to hold that one is entitled to go behind the English incorporation of the
company and to declare that all these statutory stipulations were vain, seeing that such a
company was an enemy, to trade with whom, directly or indirectly, was a misdemeanour.
Further, it appears to me to be equally unsound for a court of law to announce that,
notwithstanding all those statutory provisions, the law of the land is such that the
shareholding of a company incorporated in England has to be investigated, and trading with it
is forbidden if the substantial majority of shares is found to be, say, German. Such an
operation would write out a large portion of the statute. It would render meaningless the

particular proviso which declared that enemy character attached only to companies
incorporated in an enemy country. It is also fairly clear that under the word “substantially”
every kind of inquiry would have to be made in individual instances, say, for instance, as to
whether there were enough of alien enemy shareholders to make it an alien enemy company;
as to whether a majority would determine the matter, with the possible result of seriously
injuring large minorities of British shareholders; and, indeed, whether a company whose
shares might be transferred from day to day stood to change into and out of its character as an
alien enemy in consequence of the change of personnel in its shareholders. Such results would
necessarily follow from upsetting the plain announcement of the statute which makes British
incorporation settle high or low that the company so incorporated is not “enemy.”
What happened in the present case ? Under the statute the Board of Trade did appoint an
inspector. Since the beginning of August-that is since the war broke out-that inspector has
initialled the cheques given by company. The company has two banking accounts, into one of
which moneys received are paid. When the company receives a sum of money it gives a
receipt, and that receipt, and that receipt goes through the hands of the inspector, so that he
knows exactly the details. The inspector has charge of the bank account and the company is
not able to pay any money to the shareholders. The fact is, that all these shareholders are
German except one; but not one of these shareholders can receive under such a regime, and
during the war, any part of the assets, dividends, or profits of this concern. The company has,
however, a stock of rubber goods. I put to the learned counsel for the appellants what would
be the result of the argument with regard to such stock; he replied that it could not be dealt
with. To the further question: “If the stock were perishable?” he replied in effect that it must
perish. I think that this was a perfectly logical result, but it appears to confirm the view that
the argument itself was unfounded either upon the general law of the case or upon the
legislation to which I have referred. I do not detain your Lordships with what I think to be the
extraordinary argument that if assets are realized and a business kept up, enemy shareholders
of an English company will, at the end of the war, be benefited. Possibly they may. It is true
enough that on the other argument both they and the English shareholders might enormously
suffer, so that a species of indirect pillage seems to be involved-pillage first of the enemy and
secondly of English shareholders-thus presumably penalized for their association with others.
I must respectfully decline to admit the validity of any argument of the kind. I may, however,
further point out that if the statute and proclamation be construed as the Court of Appeal have,
I think, very rightly construed them, the results post bellum would be results depending upon
the state of British legislation and of the term of peace. So far as British legislation is
concerned it may be mentioned that by the Trading with the Enemy Amendment Act, 1914,
various provisions were made for the constitution of an office of Custodian of Enemy
Property, the custodian being appointed to hold such property “until the termination of the
present war,” and thereafter to “deal with the same in such manner as His Majesty may by
Order in Council direct” [s. 5 (1)]. In short, it seems plain beyond question that under the
existing legislation or under future Acts, or as part of a diplomatic settlement after the war,
the question of the disposal of enemy property will be fully dealt with. This does not seem to
afford any argument in support of its deterioration or destruction, meanwhile, together with
the deterioration and destruction of British rights associated with it.

In conclusion-on this head of the case-I may point out that the amending Act of 1914
provides by s. 14 that it “shall be construed as one with the principal Act,” that is, the Trading
with the Enemy Act, 1914, and that
“(2) No person or body of persons shall, for the purposes of this Act, be treated
as an enemy who would not be so treated for the purpose of any proclamation issued
by His Majesty dealing with trading with the enemy.”
It is, of course, true that this Act cannot bind the parties to the present litigation; but it
appears to be entirely in accord with the view of the former Act and of the proclamation of
September which has been taken in this opinion. So far as Parliament is concerned, the
situation is, as stated, that the country of incorporation of the company if English excludes the
company from being either an enemy company or of an enemy character : and that all the
provisions relative to the working of a company whose shareholders are mixed are provisions
which proceed upon that foundation. I am, accordingly, of opinion that the official of the
Daimler company, charged with the payment of moneys, who would have ventured to make
payment of the debt due by that company to the Continental company or to a person properly
acting as its representative, would have been safe in doing so and guilty of no misdemeanour.
The view taken upon this part of the case by the majority of the Court of Appeal appears to
me to be well founded.
It is with regret that-this being so-I find myself constrained to concur in the opinion which
your Lordships take as to the initiation of these legal proceedings. I think they naturally
followed as part of a course of previous dealings; and I am not surprised at the view taken by
Lush, J., in regard to this point. But, on the other hand, the point, it is only fair to the
appellants to say, has been from the first raised by them. Authority to raise legal proceedings
appears to be in the directors, who are all Germans, or in some person to whom they
delegated the authority. They did not before the war make such delegation of authority to
raise these proceedings. Since the outbreak of war it is not, according to my opinion,
competent for enemy directors or shareholders to have anything to do with the management of
this company’s affairs in England. A different course might possibly have been adopted by
the single shareholder in England. But the point against agency and authority to take these
particular legal proceedings has been taken; and I do not differ from the view of your
Lordships that is well founded. I agree, accordingly, to the suit being dismissed upon that
ground; but if I may venture to say so, it does not appear to me to be a case in which costs
should be awarded, even if such an award could be effective.