CHAPTER XXV. PARTICULAR CONTRACTS. (A) CONTRACTS WITH REGARD TO IMMOVABLES.1 3 RULE 151.2 The effect of a contract with regard to an immovable is governed by the proper law of the contract (?).* The proper law of such contract is, in general, the law of the country where the immovable is situate (lex situs).5 Comment. This Rule is open to some doubt. It constitutes (if valid) an exception to the general doctrine, that all rights connected with land are to be determined by the lex situs." The limitations, therefore, to our Rule must be noted:- A contract See Westlake, 3rd ed., p. 261; Nelson, p. 277. Contrast Story, ss. 363– 365. 2 Campbell v. Dent, 1838, 2 Moore P. C. 292; Cood v. Cood, 1863, 33 L. J. Ch. 273; Waterhouse v. Stansfield, 1851, 9 Hare, 234; 1852, 10 Hare, 254. Compare Mercantile Investment Co. v. River Plate &c. Co. [1892] 2 Ch. 303. 3 As to meaning of "proper law," see p. 540, ante. 4 See Exception 1 to Rule 138, p. 524, ante. 5 Compare Lloyd v. Guibert, 1865, L. R. 1 Q. B. 115, 122. See App., Note 13, Law Governing Contracts with regard to Immovables. As to Capacity, see chap. xxii., p. 517, ante; as to Form, see chap. xxii., pp. 517, 518, ante. "See, in support of Rule, Westlake, 3rd ed., p. 261, and Nelson, p. 277. Contrast, however, Story, ss. 363-365, who perhaps holds that executory contracts respecting real estate or immovables are governed wholly by the lex situs, and the language of Lord Mansfield in Robinson v. Bland, 1760, 2 Burr. 1077, 1079, viz.: "In every disposition or contract where the subject-matter re"lates locally to England, the law of England must govern, and must have "been intended to govern. Thus a conveyance or will of land, a mortgage, a "contract concerning stocks, must be all sued upon in England ; and the local "nature of the thing requires them to be carried into execution according to "the law here." 7 See Rule 138, p. 516, ante. with regard to land may be governed by its proper law, but a conveyance or transfer of land, or of any interest in land, is certainly governed by the lex situs.1 Secondly. English Courts will not enforce the doing of anything with regard to foreign land which the lex situs will not permit to be done.2 Thirdly. Parties who enter into a contract with regard to land may in general be presumed to contract with a view to the law of the country, e. g., France, where the land is situate. Hence the lex situs is in general the proper law of the contract.3 Illustrations. 1. X, an Englishman, residing but not domiciled in Chili, and A and B, his brothers, Englishmen, residing and domiciled in England, have each of them an interest in certain land in Chili. Xenters into negotiations with A and B, which are carried on by correspondence, for the purchase by X of A's and B's shares in the land. It is alleged on the part of X that the negotiations resulted in a contract whereby both A and B agreed to sell their share in the land to X. It is held by a Court in Chili that A did, and B did not, contract to sell his interest in the land. The contract is an English contract, and the question whether B contracted to sell his share in the land is to be determined in accordance with English law (proper law of contract). 5 4 2. X and A make an agreement in Scotland for the discharge of a mortgage of lands in Demerara by bills payable in Scotland. This is a Scotch contract, since, though referring to lands in Demerara, it is made and to be performed in Scotland. It is governed by, and to be interpreted in accordance with, Scotch law (proper law of contract). 6 1 See Story, s. 424, cited p. 516, ante; and Westlake, 3rd ed., p. 189, cited p. 516, ante. Norton v. Florence Land Co. 1877, Ch. D. 332, 336. 2 Campbell v. Dent, 1838, 2 Moore P. C. 292; Waterhouse v. Stansfield, 1851, 9 Hare, 234; 1852, 10 Hare, 254; Westlake, p. 261. Compare Rule 148, Exception 3, p. 560, ante. 3 See Lloyd v. Guibert, 1865, L. R. 1 Q. B. 115, 122, 123. "But then For meaning of "English contract," see p. 554, note 5, ante. "arises this question: the law of which country is it governs the transaction "and the actors in it? The right to land in Chili must, no doubt, be deter"mined by their laws; but a contract entered into between three English gentle"men, two of them domiciled and residing in England and the third residing "in Chili, but not having acquired a foreign domicil, must, I think, be governed "and construed by the rules of English law." Cood v. Cood, 1863, 33 L. J. Ch. 273, 278, judgment of Romilly, M. R. 5 Ibid. • Campbell v. Dent, 1838, 2 Moore P. C. 292. (B) CONTRACTS WITH REGARD TO MOVABLES. RULE 152.1- The effect of a contract with regard to a movable is governed by the proper law of the contract. Comment. Here, again, it is necessary to distinguish between a contract and a transfer or an assignment. A contract, e. g., to sell a movable, is governed by the proper law of the contract, i. e., by the law to which the parties must be taken to have intended, when contracting, to submit themselves. Whether the transfer or the assignment of a movable is valid, and therefore whether a contract to sell operates as a sale, depends, generally at any rate, on the law of the country where the movable is situate 2 (lex situs). Illustration. X & Co., a London firm, contract in London to sell to A, a merchant in London, 20,000 tons of Algerian esparto, to be shipped by a French company at an Algerian port on board ships to be provided by A. The esparto is to be paid for by A in London. X & Co. fail to deliver the esparto. The failure arises from the fact that at the time for the performance of the contract there is an insurrection, and military operations are being carried on, in Algeria, and commands are issued by the French authorities in Algeria preventing the collection and transport of esparto. Under French law these circumstances, amounting to force majeure, are whilst under English law they are not a legal excuse for the non-performance of their contract by X & Co. English law is the proper law of the contract, and X & Co. are liable to pay damages for the non-performance thereof.5 1 Jacobs v. Crédit Lyonnais, 1884, 12 Q. B. D. (C. A.) 589. See as to assignment of movables, chap. xxiii., pp. 529–537, ante; as to capacity to contract, Rule 146, p. 543, ante. 2 See Rules 140-142, pp. 530-535, ante; Cammell v. Sewell, 1860, 5 H. & N. 728; 29 L. J. Ex. 350 (Ex. Ch.); 1858, 3 H. & N. 617; 27 L. J. Ex. 447; Castrique v. Imrie, 1870, L. R. 4 H. L. 414; Alcock v. Smith, [1892] 1 Ch. (C. A.) 238; Hooper v. Gumm, 1867, L. R. 2 Ch. 282; In re Queensland &c. Co. [1891] 1 Ch. 536, 545. Compare, however, Cochrane v. Moore, 1890, 25 Q. B. D. (C. A.) 57. 8 Prohibiting? 4 See Sub-Rule 3, p. 569, ante. 5 Jacobs v. Crédit Lyonnais, 1884, 12 Q. B. D. (C. A.) 589. See note 5, p. 561, ante. (C) CONTRACT OF AFFREIGHTMENT RULE 153.2 - The term "law of the flag" means the law of the country 3 whereof a ship carries the flag. 4 ship is that of a state * in the law of the flag means When the flag carried by a cluding more than one country, (semble) the law of the country where the ship is registered.5 Comment. "The law of the flag" is a short expression for the law of the country under the flag of which a ship sails, and to which, therefore, she presumably belongs. 6 The flag which a ship carries may be the flag of a state, such as the United States, which consists of several countries (e. g., New York, Massachusetts, Louisiana, etc.) governed by different laws. When this is so, the flag does not of itself show what is the country to which the ship presumably belongs, and what, therefore, is the law of the flag. There is, at any rate, American authority for the statement that in this case the law of the flag is the law of the country where the ship is registered.7 Illustrations. 1. A ship carrying the Italian flag is about to sail from Havre for Bombay. The law of the flag is the law of Italy. 2. An American ship, carrying the flag of the United States 1 See for nature of contract, 3 Kent, Comm., 12th ed., ss. 201-251, and compare Westlake, 3rd ed., pp. 262, 263. See also, as to conflict of laws on the subject of carriage by sea, Carver, Carriage by Sea, chap. vii., ss. 201-217. 2 See Maclachlan, 4th ed., pp. 65, 174; Carver, Carriage by Sea, ss. 203206. Contrast, however, Westlake, 3rd ed., p. 262. 3 For the meaning of the term "country," see pp. 64, 66, 67, ante. * For the meaning of the term "state," see pp. 64, 68, ante. 5 Wharton, s. 441 and s. 357. The country to which a ship in fact belongs is ultimately fixed by the nationality of her owner, and circumstances may exist under which a ship, for some purposes at any rate, belongs to a country of which she does not carry the flag. (See Chartered Bank of India v. Netherlands Co. 1883, 10 Q. B. D. [C. A.] 521, 534, 537, judgment of Brett, L. J.) The term "law of the flag" therefore is, by some writers, given a wider sense than that which it receives in Rule 153, and is used as equivalent to the personal law of the shipowner. (See Westlake, 3rd ed., p. 262.) 7 Wharton, Conflict of Laws, s. 441 and s. 357. and registered at New Orleans, is at Liverpool about to sail for Hamburg. The law of the flag is the law of Louisiana.1 RULE 154.2-Subject to the exception hereinafter mentioned, the effect and incidents of a contract of affreightment (i. e., a contract with a shipowner to hire his ship, or part of it, for the carriage of goods) are governed by the law of the flag. Provided that the contract will not be governed by the law of the flag, if from the terms or objects of the contract, or from the circumstances under which it was made, the inference can be drawn that the parties did not intend the law of the flag to apply.3 Comment. This Rule is an application of Rule 149. The parties to a contract of affreightment, or, using more popular though not quite accurate language, for the carriage of goods by sea on board a particular ship, are presumed, in the absence of evidence to the contrary, to contract with reference to the law of the country to which the ship, from the flag at her masthead, may be seen, or at any rate may be presumed, to belong.4 66 Nor does it necessarily make any difference that, though the ship is a foreign ship carrying a foreign flag, the contract is made in England. It may still in general be presumed that the parties looked to foreign law as determining the effect of their contract.5 Lloyd v. Guibert establishes," writes Mr. Carver, “that, "where the shipowner's total liability is limited by the law of his "own country, in which he is domiciled, and under whose flag he "sails his ship, that limitation is to be implied in contracts to "carry goods in her. Whether the contract be made by the mas"ter, under a limited authority, or by the owner himself, the law "of the flag determines his liability in point of total amount.”7 1 Wharton, s. 441. 2 Compare Westlake, 3rd ed., p. 262; Carver, Carriage by Sea, s. 206; Lloyd v. Guibert, 1865, L. R. 1 Q. B. 115; The Gaetano, 1882, 7 P. D. (C. A.) 137; The August, [1891] P. 328, 340. 3 See Carver, s. 210; Chartered Mercantile Bank of India v. Netherlands &c. Co. 1883, 10 Q. B. D. (C. A.) 521; The Industrie, [1894] P. (C. A.) 58. * See The Gaetano, 1882, 7 P. D. (C. A.) 137, 149, 150, per Cotton, L. J. 5 Ibid., p. 148, judgment of Brett, L. J. 6 1865, L. R. 1 Q. B. 115. 7 Carver, s. 206. |