MERCHANT VESSELS, Transfer of from Belligerent to Neutral Flags. On ac count of the liability of enemy merchant ves sels to capture, their owners frequently at the outbreak of war or when war becomes immi nent between their own country and a foreign power seek to withdraw them from the risk of capture by transferring them by sale or otherwise to neutral registry. Are belligerents bound to recognize the lawfulness of such transfers and refrain from capturing enemy vessels so transferred? The practice of states has not been uniform in respect to such transactions. British and American practice has heretofore admitted the validity of such transfers made during or in contemplation of war provided they were bona fide, that is, if the transfer was a fully per fected transaction, in which the purchase price had passed from the purchaser to the former owner, the ship being actually delivered and duly registered in accordance with the registry laws df the state whose flag it was to fly, the former owner reserving no interests or title in the vessel so transferred. Consult the cases of the Benito Estengcr, 176 U. S. 568 (1899); the Sechs Geschwestern, 4 c. Rob. (1801) ; the Baltica, Spinks Prize Cases, 98 (1856) ; and the Ariel, Moore's Privy Council Cases IX, 128 (1857).
During the American Civil War large num bers of vessels under American registry were transferred to neutral flags in order to avoid capture by Confederate cruisers. During the war between Chile and Peru in 1879 and the conflict between France and China in 1883 many vessels were transferred to American registry for similar reasons. During the Crimean War a number of Russian vessels were transferred to the American flag and the validity of the transfers were generally sustained by the Brit ish prize court.
The French and Russian rules, however, have heretofore denied the legality of all such transfers made after the outbreak of hostil ities. At the London Naval Conference of 1908-09 an attempt was made to harmonize the conflicting views and certain rules governing the validity of such transfers were agreed upon and adopted by the conference. By article 55 of the Declaration of London transfers to neu tral flags before the outbreak of war was recog nized to be valid unless it was proved that the transfer was made in order to evade the con sequences to which an enemy vessel, as such, is exposed. The Declaration laid down certain presumptions of intent to evade the conse quences of capture, as where the bill of sale is not on hoard in case the transfer has been made less than 60 days before the outbreak of war. But these presumptions were declared to be rebuttable by evidence showing the con trary intent. The onus of proving that the transfer was made for the purpose of avoiding captnre was placed on the captor, not on the owner. To be valid in any case the sale must be unconditional, complete and in conformity with the laws of the countries concerned.
By article 56 of the Declaration transfers made after the outbreak of war were declared to be void unless it was proved that they were not made to evade the consequences of cap ture. Certain absolute and irrebuttable pre sumptions of invalidity were laid down, such as where the transfer was made in a blockaded port or during the course of a voyage or where the right to repurchase the vessel was reserved by the vendor. Unlike the rule governing transfers before the outbreak of war, the rule as to transfers made during the war is based on the presumption that the transfer is void and the onus of proving the contrary is on the owner rather than on the captor.
The Declaration of London, however, never having been ratified, its rules relating to trans fers were not legally binding on the belligerents during the World War. There being no,gen eral rule as to the right of transfer from belligerent to neutral flags, each belligerent was free to apply its own rule.
The question of the validity of transfers made during the World War was raised in the case of the Dada in 1915. This vessel was a Hamburg-American liner which, while lying in an American port, after the outbreak of the war, was purchased by an American citizen and admitted to American registry in pursu ance of a recent act of Congress authorizing the admission to American registry of foreign built ships. Subsequently while on a voyage from New York to Rotterdam the Dada was captured by a French cruiser and placed in the custody of a prize court which condemned it and ordered it to be sold. The prize court applied the old French rule which denies the legality of transfers made during war. It might, however, have treated the Declaration of London as binding and then condemned the ship on the ground that the transfer was made with a view to evading the consequences of capture. Had the Dada been captured by a British cruiser the British prize court could hardly have condemned it without departing from the precedents set by Lord Stowell and Dr. Lushington in the earlier cases. It was doubtless owing to this fact that the Dacia was by prearrangement between the British and French authorities captured by a French cruiser and sent to a French prize court for trial, thus ensuring it certain condemnation.
The Administration Ship Purchase Bill which was before Congress in 1915 raised the ques tion whether the purchase after the outbreak of the war of belligerent merchant vessels by a corporation, a majority of the stock of which was owned by a neutral government, would be an unneutral act and whether the opposing belligerent would be bound to recognize the validity of such transfers. It was the avowed intention of the supporters of the bill that in case it became law purchases of German mer chant vessels then laid up in American ports should be made and the vessels so purchased should be admitted to American registry.
The view was expressed by Mr. Lansing, then counsellor of the Department of State, and by Senators Lodge, Root, McCumher, Burton and others that such transfers would not have been in accord with the principles of neutrality since neutral governments are forbidden to do many acts which it is permissible for neu._ individuals to do. It was unofficially armour, in England and France that the British ar French governments would not recognize validity of such transfers and that in case ar enemy merchant vessel were purchased ' proposed corporation and ,Lppeared on the me seas under the American flag they wouk captured and put into a prize cutlet for purpose of testing the validity of the The failure of the bill to become law rem what would doubtless have become a set of controversy between the United States Great Britain and France. Tested by the of strict neutrality the proposed purchase a corporation, controlled by the governro of enemy ships which had been driven fu the high seas to take refuge in neutral to avoid capture and the sending of t sels on the high seas tinder the prot a neutral flag would undoubtedly have unneutral act against which injured belligeren: could iustiv have complained.