A Public War operates as a positive dissolution of Partnerships between subjects of the contending nations. Every Partnership is dissolved by the extinction of the business for which it was formed.[48] By a declaration of War, the respective subjects of each country become positive enemies to each other. They can carry on no commercial or other intercourse with each other; they can make no valid contracts with each other; they can institute no suits in the courts of either country; they can, properly speaking, hold no communication of an amicable nature, with each other; and their property is mutually liable to capture and confiscation by the subjects of the other country. The whole objects and ends of the Partnership, the application of the joint funds, skill, labour, and enterprize of all the Partners of the common business, can no longer be attained.[49]

Thus a Partnership between alien friends, is at once defeated when they become alien enemies.

This dissolution, however, only has respect to the future. The parties remain bound for all antecedent engagements. The partnership may be said to continue as to everything that is past, and until all pre-existing matters are wound up and settled. With regard to things past, the partnership continues, and must always continue.

No notice is necessary to the world to complete the dissolution of the association. Notice is requisite when a partnership is dissolved by the act of the parties, but it is not necessary when the dissolution takes place by the act of law. All mankind are bound to take notice of the War, and its consequences. Besides, any special notice would be useless unless joint, and as the partners could hold no lawful intercourse, a lawful joint notice is impossible.

It must not be supposed that peace will have any healing effect, to restore the parties to their rights; the co-partnership being once dissolved by the war, it was extinguished for ever, except as to matters existing prior to the war.[50]

With regard to the effect of war upon partnerships, where the partners are severally subjects of the belligerent powers. According to Mr. Justice Story,

"this point does not seem to have been discussed in our courts of justice until a recent period; yet it would seem to be a necessary result of principles of public law, well established and defined. By a declaration of war, the respective subjects of each country become positive enemies of each other. They can carry on no commercial or other intercourse with each other; they can make no valid contracts with each other; they can institute no suits in the courts of either country; they can, properly speaking, hold no communication of an amicable nature with each other; and their property is mutually liable to capture and confiscation, by the subjects of either country. Now, it is obvious from these considerations, that the whole ends and objects of the partnership, the application of the joint funds, skill, labours, and enterprize, of all the partners in the common business thereof, can no longer be attained. The conclusion therefore, would seem to be absolutely that this mutual supervening capacity, must, upon the very principles applied to all analagous cases, amount to a positive dissolution of the partnership."[51]

The law of nations has not even stopped at the points already stated; it proceeds further. The question of enemy or no enemy, depends not upon the natural allegiance of the partners, but upon their domicile.

[Sidenote: Partnerships.]

If a partnership is established, and as it were domiciled, in a neutral country, and all the partners reside there, it is treated as a neutral establishment, and is entitled to protection accordingly. But if one or more of the partners is domiciled in an enemy's country, he or they are treated personally as enemies, and his share of the partnership property is liable to capture and condemnation accordingly, even though the partnership establishment is in the neutral country. The inference from these considerations is, that in all these cases there is an utter incompatibility from operation of law between the partners, as to their respective rights, duties, and obligations, both public and private; and therefore, that a dissolution must necessarily result therefrom, independent of the will or acts of the parties.[52]