In Daimler Co. Ltd. v. Continental Tyre & Rubber Co., (1916)2 AC 307case, a company was incorporated in England for the purpose of selling tyres manufactured in Germany by a German company, all the shares except one were held by the German subjects residing in Germany. The contention appears to me to extend the principle on which trading with the enemy is forbidden far beyond what reason can approve or the law can warrant. or subject of a friendly State, and if it is relevant to clothe the company with a nationality, their nationality was British. No power at all was given to him by minute or resolution relative to litigation, save possibly in reference to bankruptcy proceedings; no power whatever to bring actions in general. Diamler Co Ltd vs Continental Tyre & Rubber Co Ltd • Continental Tyre and Rubber company was incorporated in England but the holders of its all shares except one and also the directors were Germans residing in Germany. Nevertheless enemy character depends on these last. Connection with statutory offences. 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. Daimler Co. Ltd vs Continental Tyre and Rubber Co. (Great Britain) Ltd (1916) was an instrumental case in lifting the veil of incorporation with respect to public policy. H.R. 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. The action is altogether irregular and should be struck out, all orders made therein being of course discharged. Daimler Co Ltd v Continental Tyre and Rubber Company (Great Britain) Limited: HL 1916 The House considered the meaning of ‘control’ in the context of companies. When the company receives a sum of money it gives a receipt, and that receipt goes through the hands of the inspector, so that he knows exactly the details. Parliament. Declaration of war. 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. The rights of all these are in complete suspense during the war. Daimler Co Ltd v Continental Tyre and Rubber Co Ltd  2 AC 307. the enemy. Finology Legal 24,006 views. property to the plaintiff sold it instead to a company which he formed, in order to avoid an order of specific performance. Before war existed between us and Germany an associated body of Germans availed themselves of our English law to carry on a business for manufacturing motor machines 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. 2 In re Daimler v. Continental Tyre and Rubber Co., 2 A. C. 307, (1916), the various opinions showed a definite tendency toward a strict fact finding attitude, the judge being advised to consider all the facts in forming his opinion, regard-less of any arbitrary criterion. The foregoing propositions are not only consistent with the authorities cited in argument, and in particular with what was said in this House in. Type Legal Case Document Date 1916 Volume 2 AC Is part of Journal Title The Law reports: House of Lords, and Judicial Committee of the Privy Council, and peerage cases Author(s) Great Britain. Paragraph 3 of the Proclamation states—“In the case of incorporated bodies enemy character attaches only to those incorporated in an enemy country.” In section 1, sub-section 2, of the Trading with the Enemy Act 1914 it is enacted that for the purposes of that Act a person should 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 issued by His Majesty dealing with trading with the enemy for the time being in force, or which at common law or by 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. A person knowingly dealing with the company in such a case is trading with the enemy. • The company supplied tyres to Daimler, But Diamler was concerned that making a payment might contravene a common law offence of trading with the enemy act 1914. He contented himself with asserting that his company is an “English company, being registered at Somerset House under the Companies (Consolidation) Act of 1908. and that he himself is a British subject, having been naturalised on the 1st January 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 authorised by the directors, or any of them, or any person connected with the company, to institute actions of any kind on its behalf. It is admitted they did not do so. This might possibly be relevant if the question for decision was whether the company had not held out the secretary to third parties as possessed of these powers in such a way as to estop them, as against those parties, from repudiating the secretary's authority. It is fair to say that the secretary of the company has denied that he has had any intercourse with the German directors or corporators since the outbreak of the war, or that any payment to the respondent company since that date has been remitted to the enemy. No one can question that a corporation is a legal person distinct from its corporators; that the relation of a shareholder to a company which is limited, by shares is not in itself the relation of principal and agent or the reverse; that the assets of the company belong to it, and the acts of its servants and agents are its acts, while its shareholders, as such, have no property in the assets and no personal responsibility for those acts. It was greatly pressed in argument that Lush, J., had in the action tried before him (. There can therefore be no order as to costs, and the appellants must be left to pursue any remedy they may have against the secretary personally in respect of the money which was erroneously paid to him. The inspector has charge of the bank account, and the company is not able to pay any money to the shareholders. The rule against trading with the enemy is a belligerent's weapon of self-protection. Where the doctrine conflicts with public policy [Connors Bros v. Connors (1940) 4 All E.R. Such results would necessarily follow from upsetting the plain announcement of the statute which makes British incorporations settle high or low that the company so incorporated is not “enemy.”. Harmer Ltd., Re (1958) 3 All E.R. Add to My Bookmarks Export citation. 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. The law on the subject is clearly laid down in a passage in Lord Halsbury's judgment in. (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.”. This page was last edited on 2 June 2020, at 11:50. 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