Scottish Court of Session Decisions

At advising on 24th February 1939,—

LORD JUSTICE-CLERK (Aitchison).—[After the narrative already quoted]—

The present claim is brought to recover from the National Bank in virtue of their obligation in the bond of caution, the loss alleged to have accrued to the Spanish Government through the wrongous interference by the Spanish owners with the use and possession of the "El Condado" under the Decree of Requisition. That interference by interdict is represented as having involved an invasion of the right of the Spanish Government as an independent Sovereign State to have its de facto possession of the "El Condado," in which it had proprietary interests, undisturbed by any process of law. The contention is that the interdict deprived the Spanish Government of the use of the vessel for public purposes and encroached upon its privilege as a Sovereign State to have its possession respected, and thus amounted to a legal wrong in respect of which the defenders are answerable in damages under the bond of caution.

This argument, which was very strongly pressed upon us, was advanced upon the authority of the judgment of the House of Lords in The "Cristina," and it is important, therefore, to see what exactly that case decided. In The "Cristina" there was a requisition of the vessel by the Spanish Consul at Cardiff under the same Decree of Requisition as we are concerned with here. The master of the "Cristina" was dismissed and a new master put in charge. The Spanish owners then issued a writ in rem claiming possession of the "Cristina" as their property. In this process the Spanish Government entered a conditional appearance, and claimed that the writ should be set aside, as it impleaded a foreign sovereign state without its consent. It was held by the Court of Appeal, and afterwards by the House of Lords, that the plaintiffs, by the arrest of the ship, which was in the de facto possession of the Spanish Government for public purposes at the material time, had directly impleaded the Government without its consent, and that this amounted to an infraction of the rule, well established in international law, that an independent sovereign state cannot be so impleaded. It was pointed out by Lord Wright that the rule was not limited to ownership but applied to cases where what the Government has is a lesser interest, which may be not merely not proprietary, but not even possessory, and thus the rule would apply, according to the ratio of Lord Wright's judgment, in the case of a vessel which under requisition was subject to the direction and control of the sovereign state.

The "Cristina" was simply an instance of the immunity from legal process which the Courts recognise as attaching to an independent Sovereign State unless it waives its immunity by actively invoking the jurisdiction of the Courts, as when it brings an action, or by passively submitting to the jurisdiction, as when it appears in an action without objection. Whenever in an action directly or indirectly impleading a foreign sovereign the immunity is pleaded, the Courts are precluded from embarking upon any inquiry into the matter of the dispute; the jurisdiction is excluded. From this it follows that both in The "Cristina" and in the interdict proceedings of the "El Condado," the immunity being pleaded, no question was or could be decided, or even discussed, as to the validity of the Decree of Requisition either within or without Spanish territory. The jurisdiction having been challenged, in neither case can the judgment of the Court be pleaded as having affirmed the validity of the Spanish decree or the legality of the requisitions thereunder.

In the present action the Spanish Government, so far from pleading its immunity from legal process, has by the action expressly invoked the jurisdiction of the Court, and it invites the Court to adjudicate in the dispute between it and the defenders. It is claiming damages arising out of the alleged wrongous interference with its possession of the "El Condado." The question is, Are the defenders not to be allowed to maintain their defence that the possession of the Spanish Government was at no time a lawful possession, but was throughout an infringement of the lawful rights of the owners of the vessel? That would indeed be a strange and unprecedented extension of the doctrine of the privilege enjoyed by a sovereign state; it would mean immunity when the jurisdiction is declined, and immunity when the jurisdiction is invoked. When the Spanish Government was resisting the process of the Courts the only relevant fact was that it had in fact requisitioned the "El Condado" and was in the de facto possession of her. All other issues were excluded. But when the Spanish Government is seeking damages arising out of a legal wrong, and is using the process of the Court for that purpose, the Court must be free to consider whether any wrong was in fact committed. I have no hesitation in rejecting the reclaimers' argument that the Court is excluded by the judgment in The "Cristina," and the consequent judgment with regard to the "El Condado," from going beyond the fact of possession and inquiring into the title of the Spanish Government with reference to the possession which it had.

If, therefore, the Court is free, as in my opinion it is, to inquire into the character of the possession at the material time, the only remaining question is whether that matter can be determined without proof. If the Decree of Requisition of the Spanish Government fell to be regarded as a confiscatory or penal law it could have no validity outside Spanish territory, and the Courts of this country, in accordance with an accepted rule of international law, would not grant their aid to its execution. This rule was formulated by Lord Loughborough in Folliott v. Ogden . That was an action brought in England upon a bond which had been confiscated during the War of Independence by a law of the State of New York. The debtor in the bond pleaded that the creditor had become divested of his rights by the act of a foreign Legislature, and that the action was not maintainable. In repelling the plea Lord Loughborough said (at p. 135):

"The penal laws of foreign countries are strictly local, and affect nothing more than they can reach, and can be seized by virtue of their authority; a fugitive who passes hither, comes with all his transitory rights; he may recover money held for his use, stock, obligations, and the like; and cannot be affected in this country, by proceedings against him in that which he has left, beyond the limits of which such proceedings do not extend."

Does that rule apply equally to legislation which is not confiscatory or penal in the full sense, but the effect of which is to subject the owner of moveable property, in his use and control of that property, to the overriding control of the State where, as in this case, the property is requisitioned by the State for public purposes? There is no direct authority upon the point. The nearest case is perhaps The "Jupiter," (No. 3). It was there held that the nationalisation decrees of the Union of Socialist Soviet Republics did not operate on moveable property outside the territory of the Republic, whether such property belonged to a Russian citizen or not. It was a fact in that case that the "Jupiter" was not, at the date when the decrees were promulgated, within Russian territory. In this case it is expressly conceded that, at the date of the requisition, the "El Condado" was not within Spanish territorial waters, and she was in the port of Greenock when the de facto possession was taken. In The "Jupiter" Hill, J., pointed out that no distinction could be drawn between ships and other chattels and that the same principles were applicable to both, and he reached the conclusion that the decree of nationalisation was ineffectual to transfer the property in the ship, which was not within the jurisdiction at the date of the decree. His judgment, as regards both fact and law, was affirmed by the Court of Appeal. The case is not on all fours, but, in my opinion, the principle of Hill, J.'s, judgment applies to the present case. The test to be applied is this: Supposing the Spanish Consul, instead of taking possession of the "El Condado"brevi manu, had sued the owners in the Courts for the delivery of the ship, could the action have succeeded? I am satisfied it could not. It could no more have succeeded than an action by the Spanish Consul for recovery of moneys belonging to the Spanish owners in a bank in this country and requisitioned for the temporary use of the Spanish Government to finance the war. The conclusive answer would be that it was moveable property that was outwith the territory and jurisdiction of the foreign sovereign state, and, having been so at the date of the decree, it was not capable of being affected by the requisition. That is the ground of the Lord Ordinary's judgment; and, in my opinion, he was right in dismissing the action, because, if no wrong was committed by the owners of the ship in respect that the Spanish Government had no lawful possession of her, notwithstanding that they could not be impleaded, no liability can attach to the defenders under their bond of caution.

I might have contented myself in this case with simply expressing my concurrence with the Lord Ordinary in his very careful judgment, with all of which I agree, but, in view of the anxiety with which the question was argued, I have thought it right to express my own view.

Upon the whole matter I move your Lordships that the reclaiming motion be refused.

LORD MACKAY .—There appears to me, not one, but multiple grounds on which we may, as we are sought to do by both parties, reach a direct but at the same time a safe and lawful solution.

The pursuers are, they allege, a government of a recognised state foreign to the Sovereign of Britain. They allege accordingly possession of the status of a "Sovereign." Although, strictly speaking, a Republic Government may not be a sovereign within ordinary language, yet for the purpose of the sort of question, videlicet,immunity from the claim of another, or from their claims in answer thereto, being adjudicated upon by British Courts (unless they shall refrain from suitably asserting, and so let slip that right to immunity), this quality of sovereignty is possessed. But, having that sort of sovereignty, they now come here to sue at the hands of the Supreme Court in Scotland for an award of damages against a Scottish bank. The civil damage and the civil wrong alleged are said to be the resultant of a wrongful or wrongous retention of a certain vessel by way of an interim interdict or interdicts pronounced in personam against those willing to sail the vessel, "El Condado," away from Greenock Harbour to the high seas. The period over which some form of interim order—first an order by the Sheriff-substitute, afterwards an order by this Court—ran was 10th July 1937 to 8th March 1938.

I shall begin by stating what was hardly disputed, that, coming here in suitor's guise, the foreign Government is by its own resort here stripped of any privileges or immunities whatsoever, which, if convened unwillingly into a British Court, it had the option of pleading. In spite of faint argument in a different sense by Mr Gibson, the pursuers are no better, in this Court and in this present suit for damages, than any other lawful pursuer. The law is the same in essence in England—see Dicey, (1932 ed.) p. 199. But Scots law has long adopted the maxim—Inter consentientes cujusvis judicis qui tribunali prœest vel aliam jurisdictionem habet est jurisdictio. Nextly, and almost equally indisputably, since the time when our law as to reparation for wrongous use of interim interdict or wrongous regulation of the status of a subject-matter pendente lite was fully developed in the cases of Clippens Oil Co. v. Edinburgh and District Water Trustees and John Macdonald, Limited, v. Lord Blythswood, the relevant law is clear. It is statable thus:

"The interdict said to have been wrongously obtained has been recalled. That shows that it ought not to have been asked for. That is not sufficient per se to found an action of damages. The interdict must have operated a civil wrong."

I have in the above used the very words of Lord Ormidale (Ordinary) (at p. 932), but the words of Lord President Dunedin, concurred in by Lord Johnston and Lord Skerrington in the reclaiming note, are equally emphatic and clear. I am of opinion, then, that the statements made in 1898 by that usually excellent and accurate writer Graham Stewart in his book on Diligence at p. 871, wherein he puts actions upon interdicts asked for periculo petentis into a parallel category with "wrongous diligence," and founds himself somewhat strongly on the case of Miller v. Hunter, must now be read with suitable care. It is no longer possible to follow the earlier submission of junior counsel that, wherever an interdict which was obtained ex parte is recalled, there damages flow, and that the only question left is a jury question of amount. Not so. In all cases the first question is; "Was there a legal wrong in the circumstances?" The pursuer falls in each and every case to take an issue of wrongful interdict, and it falls to him to prove both the fact of his legal injury and that the actual damages flowed. There are in the books a few exceptions to the first requirement, the proof of a wrong; these are where and when the Court has already fully examined the merits and has expounded the wrongousness of the original claim or the inaccuracy of the facts adventured by the party as the basis of interim regulation in his favour, and when that matter is now res judicata. In the end Mr Gibson, I thought, came to admit this. Whether he did so or not, that is the present law. But he did plead, and sought to establish, that, by virtue of the recent House of Lords case of The "Cristina" from Cardiff, and that by force of that decision alone, he had all along between 10th July and 8th March conclusively suffered such a wrong—as he called it, an "invasion of legal rights established and recognised by our municipal law." What the supposed "rights" "recognised" in his Sovereign State are, is the chief question of any difficulty. I shall return to that rather more difficult question anon.

Meantime, I note that, in spite of the fact that the Bank's pleadings contained certain very specific and detailed challenges going to the validity and to the scope of the alleged "decree of law" or "requisition" made in Spain, on account of (a) its not being effective in Bilbao, merely because Bilbao was no longer part of the de facto geographical Spain in which these writs ran; (b) of its not in any event having extra-territorial power, so as to attach ships belonging to a Francoist owner, and situated within the hospitality of British harbours; and (c), in any case, because all Bilbao shipping was now subject to, and affectable only by, orders and regulations of a certain other Government (exclusive by law of the original de jure Government), a new Government at the crucial dates enjoying de facto recognition by Britain—in spite of all these things we were moved to grant decree of damages de plano. In so doing we should be holding the whole defence on the merits to be totally irrelevant. I am wholly certain that we cannot and dare not assent to that very strong proposition. To do so might very well be not only to perpetuate, but indeed to remunerate, a wrong.

I pass now to consider the interesting and important question, What is to be taken as the true intent and meaning of the immunity or privilege as pled by the present pursuers in the original Sheriff Court action, and what is the exact scope of the doctrines now established by The "Cristina"? So considering, I have arrived easily at the very clear conclusion that, for the greater part of the eight months sued upon, the pursuing Government and its Ambassador have not a vestige of a case. It may be true that this answer disposes finally of only two-thirds of the claim; but that is much, since the answer is free of difficulty and decisive. Therefore I venture to state my reasons thus: The total period, in my opinion, falls into three quite distinct sub-periods: (1) 10th July 1937 to 5th October; (2) 5th October to 15th December; (3) 15th December 1937 to 8th March 1938. That in the first period no legal wrong was done to the present reclaimers to form the subject of any damages action seems to me certain. I do not found alone on the main point that, till they voluntarily sisted themselves on 5th October, they were not personally subjected to the decree in personas which affected named persons then defending, and hence were not entitled to claim the cover of the bond ordered by the Sheriff in terms of his order dated 24th July 1937, which terms were recited in the bond itself. But I go farther. In my judgment, the legal point, established for the first time for the shipping lying within a foreign port, or on commercial pursuits afloat, by the speeches in The "Cristina," is not a part of "the merits" between the parties in the initial suit. It does not affirm that "rights," whether in ownership or in temporary possession or otherwise, are set up over all such shipping in foreign harbours or on the high seas by the bare claim of a sovereign to such forms of possession. It imports merely a withholding of powers; this withholding arises by virtue of the comity of nations, and by the presumed will of our own Sovereign that his judges shall not exercise their power to decide or to compel, in any disputes within the territory, wherein the foreign Sovereign (he himself granting the like comity) interposes under a protest, and elects to plead his immunity from judgments of all sorts. This immunity thus vouched excludes all judgment on any merits whatsoever. The exclusion goes indeed to jurisdiction; but not to a nullity or total defect of original jurisdiction. It takes effect only (a) when and after the point of immunity is tabled by a person who (as a protesting compearer) is and remains after his protest a non-litigant, an intervener in the cause to point out his conceded privilege; and (b) (as I read the majority of the learned judges in The "Cristina") only when and after these same Courts are satisfied by evidence, or by affidavit, of certain necessary preliminaries. Of these preliminaries to sustaining the immunity, one, and the most important, is possession (of whatever kind, and however obtained) at the moment of the assertion of the immunity. Such is the view of Lord Wright (at p. 506). In such delicate matters every word should be assigned its weight.

It follows that, although the non-sovereign persona, or individual, Larranaga, and his skeleton crew ("i.e., all persons acting under him") were personally subjected to an interim prohibition or interdict, and although in his defences (tabled in August 1937) he tried to raise (by a sort of reflected glory) the question of a sovereign immunity, he and his servants at these dates possessed no right or title of any sort so to address a protest, or claim to immunity from being subjected to jurisdiction, to any of our Scottish Courts. Moreover, it is the fact that he, for himself and those under him, compeared in the process and joined issue in defences, without "protest" of any sort. Nothing was effected to alter that legal posture of affairs, while questions of mandataries and questions of sisting others claiming to be owners of the vessel arose. Up to the time, then, when the Government itself and its Ambassador saw fit to lodge defences (4th October) and to state in them the claim of immunity, and when they obtained themselves sisted (5th October), there was not only an eminently substantial matter to litigate, but there was no representation contrary to fact or law made by the agents who (in the presence of Larranaga) sought the Sheriff's interim order, which the applicants can now be called upon to make good. There was, on the contrary, every just expectation that the true facts bearing on recent dispossession as against the now admitted ownership rights would be litigated to a finish in the Sheriff Court. Jurisdiction at that time was perfect. I add that, in my opinion, the points to be adjudicated were not merely real and substantial. They were more. They should have resulted in success if the Sheriff could have reached them. Moreover, the jurisdiction would not, even by 5th October, have been weakened if the Government had, as they might have, thought fit to challenge a decision and had not elected to claim the immunity. Till a recognised foreign Sovereign so elects, the Court has no command from its own Sovereign to hold its hand. It was therefore quite impossible to say that, until the fresh defenders entered and pled, Larranaga was possessed of any inalienable right to oust the overt owners from possession as he had purported to do de recenti (two days prior to the first order in the challenge), or that the owners were in the wrong.

The failure of the pursuers' case is even more emphatic in the whole period ensuing after 15th December. At that time the Sheriff Court interim order, to which the bond of caution corresponded, expired, it was agreed, by the calling of the case on appeal before us. We interposed a new interim order, and that order we can interpret for ourselves. The facts are fresh, and our own interlocutor of 15th December fully explains them. We called the case, and the points of law were partly heard. It was moved by the then appellants to continue the hearing to await the decision of the House of Lords in The "Cristina." Doubting whether in a matter of international rights of such importance we should agree to withhold our answer, and perhaps foreseeing just such a claim as this emerging, we refused to acquiesce in the motion so made by the Dean of Faculty without having Mr Gibson's express consent. He at first refused it. We called for the argument to proceed. Thereafter the said counsel for the Government concerned interposed in his opponent's speech, in order to say that he had now power to give express consent. The Court pointed out that to give fair effect to a consent to such a postponement some undertaking must supersede the older order now expired, and thereupon, of express consent of both parties, we gave interim interdict. My colleagues who sat with me will bear me out that this was intended to put neither party in full possession, but rather to regulate, as from the Court, the status quo pending an agreed continuation. The new order was accordingly not one taken periculo petentis of the appellant, but one on joint motion, the intention equally of both being to avoid the necessity of hearing the case out then and there, and obtaining an immediate Scottish decree.

If, not on ex parte statements, but by full agreement at the bar, two parties both move for interim regulation, and that for a specific purpose, such delay cannot, in my opinion, yield the profits of wrongous interference to any one party against the other.

Far the greater part of their claim for dock dues and skeleton crew wages has thus already fallen. There remains to be dealt with the question as to the middle period of (at most) nine weeks. Here, and only here, does the present situation lead to arguable matter. I have already expressed the views that, at best for the pursuer, (a) the pursuer must take a proof to prove his wrong; (b) the defenders' defences are relevant for them to prove as going to negative any wrong committed.

Normally, I think, under the law to which I have adverted, the present pursuers would be entitled to a proof directed in the first place to set up that the owners of the vessel "El Condado" did them a legal wrong for these weeks. Two further submissions now emerge. Mr Gibson argued, from the speeches in The "Cristina," as he understood them, and from the old cases in Scotland of Miller and Wolthekker, that the question of the merits was now ascertained judicially in his favour and could not be reopened at all in the present case. His argument was that the acquiescence of the principals for whom the cautioners interposed, evidenced by the minute of 8th March, in the results of The "Cristina," put him in the same position as if he had been the compearers-under-protest in that case. If so, he argued, the speeches involved more than a mere success of a plea for immunity from jurisdiction; they involved a declarator or judicial ascertainment in the person of the Sovereign compearing of the right to the property, or at least to a possessory right of a similar legal quality. Further, it was said, the judgment of the House involved the total rejection of the plea of "no extra-territorial effect."

I am, shortly, of opinion that both points are bad. As regards the extra-territorial question, it seems true that in The "Cristina" it was attempted tentatively by way of argument to rely upon the English case of Russian Bank for Foreign Trade v. Excess Insurance Co., distinguishing The "Jupiter." That argument was (necessarily) limited to an attempt to exclude the immunity (see p. 488). It is true one judge (Lord Wright at p. 509) seemed to myself at first sight to touch upon the point argued in such manner as though he refused to accept the point. But all he really says is that for the question of refusing all inquiry (beyond the fact of a very limited possession) such points of attack on the validity of the precluded title cannot afford a distinction from the precedents already decided. On the other hand, the majority, led by Lord Atkin, emphatically reserve the very point. His Lordship says (at p. 493) not only that it is unnecessary to deal with it, but that it would be highly inexpedient to deal with any point that was unnecessary for the very limited purposes of the decision.

The other point was, at first sight, a little more plausible. I am satisfied, however, that, on a proper reading, the idea that Lord Atkin (at p. 490) made use of a dual ratio—the first (alone) founded on immunity, the second on the express or implied assertion of a real establishment of a right of property—is fallacious. Rightly read, in these two heads or grounds referred to by Lord Atkin, his Lordship was merely pointing to two aspects of the plea of immunity by the principle of comity—one dealing with impleading the person, another with the existence of control or possession—on behalf of the foreign sovereign. But both are treated as cases of immunities, and nothing more. The expressions referable to possession which figure in Lord Wright's speech, as cited from p. 506, do certainly not refer, as Mr Gibson argued, to the "first ground" alone. They apply especially to the second.

And the possession which is spoken of is not ascertained legal (judge-sanctioned) possession. It is merely de factopossession, and at one ascertained point of time. Such possession, which must as essential preliminary be established, may be of any origin, and may indeed, in my opinion, be itself in truth wrongous. Possession attained vi, clam, or precario will do as well as any other. Hence the notion that some sort of declaration of actual "right" to ride off with vessels from a British harbour was set up, a right of which any attempted legal deprivation or restriction would be a "wrong," is a misconstruction of the whole Public International Law doctrine. Further, as my brother Lord Wark will develop, the alleged wrong seems (in counsel's view) to enure from the time a notice was put on the mast, and from the raising of the action. If so, it was not the interim order that committed the wrong. We cannot overlook that the Bank here were cautioners under a bond, and expressly only for the damage duly proved to have been done by the passing of interim interdict. In my opinion, possession at no other date is important for the immunity doctrine except the actual date when the plea was taken.

I can deal less fully, since I have listened to your Lordship in the chair, with the last question which arises. That is whether, as argued by the defenders, we may here and now exclude action and proof, by finding established a competent and perfect answer on sufficiently established facts. The parties did mutually wish us to take short cuts to a final result if we could. I had prepared an examination of the cases referred to by your Lordship. I will not repeat, but will only say that I find in them a most emphatic train of eminent English judges in favour of the view that such "decrees" of a foreign country as purport to have extra-territorial effect, and to attach property in a subject situated, and at a time when it is situated, within this country or its territorial waters, will not be recognised by our laws and Courts. If it be urged that such expressions were all pronounced obiter, I reply that a long series of obiter dicta of high authority, all in one sense, are a sound foundation for a judgment now, unless they be shown to err in principle. If so, what of a vessel enjoying the hospitality of our waters, registered in Bilbao and belonging to an owner there? I am prepared to follow your Lordship in forcing the pursuers, instead of pressing for a new letter from the Foreign Office, to be content with the already twice-repeated public act of the British Government, vouched by such letters produced to the two English courts in the two English cases cited to us and decided between the "Cristina" judgment and this of ours. We are entitled (since these matters are of public record in a British court) to refuse to call for a third letter.

The way, then, is open to hold that, at the crucial dates, and particularly both at 28th June and 10th July, and at 7th August and at 5th October, that part of the territory of old Spain known as Bilbao was subject to a de facto recognised government whose fiat excluded any of other pretending governments asserting powers over the same area.

The question of extra-territoriality arises doubly. It is for us a question to be decided on Scots law (in the absence of any averment of a differing Spanish law) whether we are to hold that a decree of a de jure government (issued in Barcelona or Madrid) can have extra-territorial effect upon (a) a ship situated in our harbours, and (b) a ship registered at a port within, and belonging to a company domiciled under, General Franco's de facto government's jurisdiction. I am of opinion that such extra-territorial validity is not recognised by Scottish law. The sealed document exhibited in the former case and lying before us bears in its terms to have "requisitioned" all ships of certain registration. That means, in my opinion, by Scots law, that a requisition of full property was intended, in the full sense of the word "requisition" as so well known to our Courts during the years 1914 to 1918.

I am prepared to hold, therefore, that the pretended title of the pursuers was, in fact and in law, bad; and that the original owner's right of ownership was never lost or adversely affected. Hence no judicial wrong was ever done to the pursuers, even between 5th October and 15th December. I agree on these fuller grounds with the results of the Lord Ordinary, and I agree that we should adhere to his judgment.

LORD PITMAN .—I agree that the reclaiming motion should be refused. In my view the rights of parties and obligations of the Bank must be looked at from the same point of view as that from which the Sheriff-substitute had to consider the question when the so-called wrongous interdict was granted—that is to say, as at 12th July 1937. The s.s. "El Condado," the property of a Spanish company and registered at Bilbao, was lying peacefully in the harbour of Greenock in charge of a master appointed by the company, when she was boarded by one Larranaga, professing to have been appointed captain by the Spanish Government. The captain and officers appointed by the owners were dismissed by the Spanish Consul in Glasgow, and the ship was requisitioned on behalf of the Government of Spain. Thereupon the owners petitioned the Courts of this country to interdict the new captain, and all others acting for him, from removing the vessel or interfering with it, and to grant interim interdict. Interdict was granted upon caution, the bond of caution being signed by the National Bank. It was not until the 5th of October that the Government of Spain intervened in the process. In my view neither the terms of the bond nor the intervention of the Government of Spain affect in any way the legal question upon which the present question turns, viz., Was the interdict wrongous? If it was not, the petitioners cannot be liable in damages and the cautioners are free. The question in dispute was whether the Spanish Consul was entitled to take possession of the ship. That is the question which would have been decided if the Spanish Government had not intervened and claimed immunity. That is still the question which has to be answered before it can be decided that the petitioners rendered themselves liable in damages, which to the extent of £1000 must be met by the Bank.

Counsel for the Government really rested his case on the decision in The "Cristina," and argued that the Government's right to requisition the ship was decided in his favour in that case. When a case decides one thing, and one alone, it is of no avail to select isolated observations of individual judges and argue that the case decided something more. As I read the opinions, each and all of the learned judges held that, in the circumstances of the case, the Government of Spain was entitled to claim immunity from the jurisdiction of the Courts of this country, and that was the decision of the Court. A similar decision had been given by the learned Sheriff-substitute in the case of the "El Condado."

In the present case the Government of Spain asks the Courts of this country to decide the very question which its claim to immunity prevented the Court from deciding in the previous case. It claims damages for wrongous interdict granted in July 1937, and the question whether that interdict was wrongous cannot possibly be affected by the action of the Government in October of that year? Was the interdict wrongous in July 1937? That question cannot have been decided in the previous case, because no Court can hold that it has no jurisdiction to decide a question and in the same breath decide it. In the present case this Court has jurisdiction to decide a question against a sovereign power because the sovereign power has come to the Court to ask for its decision. The foreign sovereign power cannot ask the Court to give it damages because, in another action, the Court ignored its ipse dixit and interdicted its servant from obeying its orders when, according to the law administered by this Court, the ipse dixit was of no avail. On the merits of that question practically no authority in support of the validity of the requisition was quoted by pursuers' counsel. So little fight was put up by them on this aspect of the case that I shall content myself with concurring in the views already expressed. Requisition is not a legal method in this country of transferring property or rights of user of property, except at the instance of the Crown. It is the prerogative of the Crown in times of imminent national danger to take any steps necessary to secure the defence of the realm, and in 1914 by virtue of that power regulations were made by His Majesty in Council providing, inter alia, for the requisitioning of ships by the competent naval authority. It would be strange indeed if a foreign State were allowed to exercise similar powers here, and by its officials take forcible possession of property requisitioned.

LORD WARK .—I agree with your Lordships, and if it were not for the novelty and importance of the case I should be content to say that I agree in every point with the reasoning contained in the very lucid and convincing judgment of the Lord Ordinary.

The argument for the reclaimers at its highest appeared to be founded upon the view that the mere raising of the action of interdict was a legal wrong, in respect that it was an attempt to implead a foreign sovereign. This view is, in my opinion, unsound. There is, so far as I am aware, no ground in principle or authority for holding that a person, whether a subject of the foreign sovereign or not, is not entitled to bring an action in our Courts with reference to property which is or may be claimed as the property of a sovereign state. Such an action is perfectly lawful and competent. It is subject only to this risk, that, if the sovereign chooses to plead immunity from process, the Court ex comitate gentium will decline jurisdiction. But if he does not so choose, the action may proceed in ordinary course to judgment. The rule is one of comity only, and does not proceed upon the view that such an action is either incompetent or wrongful. The main argument, however, had reference to the interim interdict obtained in the Sheriff Court action by the pursuers, for whom the present defenders are cautioners. It was maintained that this was a wrongful interdict for four reasons: (1) that it interfered with the present pursuers' right of user of the "El Condado," of which they were in lawful possession at the date when the action of interdict was brought; (2) that in the interdict action the Sheriff-substitute had decided that they had a lawful right of possession in the ship; (3) that in the case of The "Cristina," by which admittedly the appeal in the Sheriff Court action was ruled, their lawful right of possession was also affirmed; and (4) that, that judgment having been admitted as ruling the interdict case and the interdict having been withdrawn, the defenders must be taken to have acquiesced in the view that it was a wrongful interdict. They maintained, therefore, that it was not open to the defenders to challenge their right to possession of the ship, and that the defences, except as to amount of damages, were irrelevant.

In my opinion, this argument proceeds upon entirely wrong premises. When the present pursuers appeared in the Sheriff Court action, it was for the purpose of pleading their immunity as a sovereign state, and for that purpose alone. The only question decided by the Sheriff-substitute was with reference to this plea. He decided it in favour of the present pursuers, and his ground of decision was that the mere claim by them that they had an interest in the ship gave them immunity from judicial process. He had before him a certificate by the Spanish Ambassador that the Decree of Requisition of 28th June 1937 was a valid decree affecting the "El Condado." He held that he must accept that certificate as proof that the pursuers intended the Decree to apply to the "El Condado," and that he had no jurisdiction to entertain the action. The validity of the Decree as affecting the ship and the lawfulness of the possession taken of the ship by the pursuers were not inquired into, and in the view of the Sheriff-substitute could not be inquired into by him.

The decision in The "Cristina"was also confined to the question of the immunity of the Spanish Government from judicial process. In the House of Lords it was held that a mere claim to the ship was not sufficient, but that actual possession of her was sufficient to bring her into the category of property of a foreign Sovereign and to afford the immunity claimed. The House took the view that the question of how possession was obtained was immaterial, and could not be inquired into in that action. The validity of the Decree of 28th June 1937 as affecting the vessel was not, and in their Lordships' view could not be, inquired into either. Lastly, in abandoning their appeal after the decision in The "Cristina" the owners, in my opinion, made no admission of any kind regarding their title to the ship and to its possession, but only admitted that the plea of immunity had to be sustained.

In this action the pursuers have chosen to invoke the jurisdiction of the Court in an action of damages. In my opinion, in doing so they have placed themselves in the position of ordinary litigants. If they complain of a wrongful interdict, they must establish that it was wrongful, and by that I mean that they must show that the possession which they took of the "El Condado" was a lawful possession, and that the interdict was an invasion of a legal right which they had to the possession of the ship. This means further that they must show that the "Decree of Law" enacted on 28th June 1937 was valid and effectual according to the law of the forum to which they applied, namely, Scotland, to entitle them to the possession and control of a ship lying in a Scottish port, which, admittedly, at the date of the Decree and continuously thereafter had been outwith Spanish territory and territorial waters. I say "according to the law of the forum," because they make no averments of Spanish law on that matter.

I agree with the Lord Ordinary and with your Lordships that the Decree is of no effect outwith Spanish territory and territorial waters, and gave the pursuers no right to requisition the "El Condado" or to take possession of her as they did. On such a matter as this there is no difference between the law of England and the law of Scotland, and the decisions of the English Courts to which the Lord Ordinary refers, especially the case of The "Jupiter," No. 3, appear to me to be sufficient authority to support his decision. I refer to the judgments of Hill, J., at pp. 138 and 144, and Atkin, L.J., and Lawrence, L.J., in the Court of Appeal at p. 255. It is true that that case dealt with the question of transfer of property, but the ratio upon which it proceeds is that the decree of a foreign Government has no effect whatever upon moveable property, including ships, outwith the territory. This doctrine rests upon the principle that jurisdiction is limited by effectiveness. It is recognised in several recent cases, notably in Sedgwick Collins & Co. v. Rossia Insurance Company of Petrograd, by Sargant, L.J., at p. 14, and by the Lord Chancellor in that case in the House of Lords, at p. 102, and in Russian Commercial and Industrial Bank v. Comptoir d'Escompte de Mulhouse, by Lord Chancellor Cave at p. 125, and Viscount Finlay at p. 137. "A State's authority," says Professor Dicey, in the Introduction to his Conflict of Laws, (5th ed.) at p. 20, "in the eyes of other States and the Courts that represent them is speaking very generally coincident with, and limited by, its power. It is territorial. It may legislate for, and give judgments affecting, things and persons within its territory. It has no authority to legislate for, or adjudicate upon, things or persons (unless they are its subjects) not within its territory."

There is a second ground upon which the defenders maintain that the pursuers' averments are irrelevant, namely, that, at the date of the Decree of 28th June 1937, Bilbao was no longer in the possession of the Government of the Spanish Republic, but was in the possession of the Nationalist Government of General Franco which had been recognised by the British Government as the de facto Government of part of Spain, including Bilbao. This is not admitted by the pursuers, but I think we are entitled to take cognisance of the fact that it was so certified by the Foreign Office in two recent reported cases. If it were necessary, therefore, I should be prepared to hold that on this ground also the Decree had no validity as affecting the "El Condado." But, in view of the conclusion I have come to upon the main argument, it is unnecessary to proceed upon this ground. Nor is it necessary to examine critically the process in order to see to what extent the interdict complained of was originally one not affecting a sovereign power or was continued of consent, although I agree with my brother Lord Mackay's recollection as to what happened in the appeal before this Court.

The result is, in my opinion, that not only are the defences relevant, but the pursuers' averments are irrelevant, for they have failed to set forth any right whatever to property in or possession of the "El Condado," and have therefore failed to aver any legal wrong suffered by them in consequence of the interdict complained of.