Lehigh Valley R. Co. v. State of Russia

• Citation: 21 F.2d 396
• Decision Date: 08 August 1927
• Docket Number: No. 318,319.,318
• Parties: LEHIGH VALLEY R. CO. v. STATE OF RUSSIA.
• Court: United States Courts of Appeals. United States Court of Appeals (2nd Circuit)

21 F.2d 396 (1927)

LEHIGH VALLEY R. CO. v. STATE OF RUSSIA.

Nos. 318, 319.

Circuit Court of Appeals, Second Circuit.

August 8, 1927.

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Hornblower, Miller & Garrison, of New York City (Charles A. Boston, of New York City, George S. Hobart, of Newark, N. J., and Nash Rockwood, of New York City, Edgar H. Boles, and Richard W. Barrett, of counsel), for plaintiff in error.

Coudert Bros., of New York City (Frederick R. Coudert and Hartwell Cabell, both of New York City, Mahlon B. Doing, and B. F. Sturgis, of counsel), for the State of Russia.

Charles Recht and Osmond K. Fraenkel, amici curiæ.

Before MANTON, L. HAND, and SWAN, Circuit Judges.

MANTON, Circuit Judge.

The defendant in error has recovered a judgment against the plaintiff in error for loss of explosives and ammunition while in transit from the United States to Russia and while in its possession as carrier in its freight yards at Jersey City, N. J. The loss is due to a fire and explosion occurring July 30, 1916, and it is admitted that the fire was incendiary in its origin. The action by the defendant in error was instituted by the Russian government, and after the deposition of the then government of Russia, pursuant to an order granted, the action was continued in the name of the state of Russia.

Eight carloads of high explosives were on the same railroad siding, and, separated by a single car, on the same siding were seven cars of benzol and wet nitrocellulose; on an adjoining track were seven cars of ammunition of cannon. In the same vicinity were eight other cars of ammunition of cannon, two cars of combination fuses, and another car of benzol. A fire started in a car of ammunition prior to the first explosion, which occurred on a barge in the North River, which barge was also loaded with explosives, and then another explosion occurred in a car in the terminal. The barge was owned and operated by the Johnson Lighterage Company. After the fire started, no one, because of fear of the result that might follow from the explosive materials, attempted to put out the fire. Neither the railroad men, private detectives, nor the city firemen attempted to apply water or otherwise combat the fire, with one exception, a crew of the railroad men, who succeeded in removing some cars to a place of safety. Some lost their lives in this act. The railroad company failed to maintain a locomotive at the Black Tom Terminal, and the engine used in removing these cars was brought 2½ miles from Communipaw yards. At the time there was in force regulation No. 1906, which provided that in case of fire, to protect cars marked by placards "Inflammable," they should be quickly isolated. But in any case the explosions occurred before the engines arrived. Liability was imposed below because of the breach of the railroad's obligation as a common carrier, as supplemented by the Carmack Amendment (Comp. St. § 8604a 49 USCA § 20), under the terms of the bills of lading issued.

There is a companion case (C. C. A.) 21 F.(2d) 406, referred to as action No. 2, but which is based upon the theory of negligence, which was tried at the same time. The trial of this action was suspended, and action No. 2 was begun and concluded before the same judge, but a different jury. It involved the destruction of war materials, aluminum, and other property in a nearby warehouse. The parties in writing stipulated that the specific findings, answering two questions propounded to the jury in action No. 2, might be used as facts in action No. 1. The jury found that the fire originated in the railroad terminal and the first explosion occurred on the barge Johnson No. 17. It also found, in action No. 2, that the railroad company's sole negligence was the proximate cause of the loss of the aluminum in the warehouse.

At the outset the railroad company attacks the right of the defendant in error to maintain the suit, and to do so in the courts of the United States. The right to recover damages for breach of this carrier's obligation became the property of the state of Russia on July 30, 1916, when the loss occurred. The government was then the Russian Imperial Government. The right of a foreign government to sue is now well recognized. Oetjen v. Central Leather Co., 246 U. S. 297, 38 S. Ct. 309, 62 L. Ed. 726; The Sapphire, 78 U. S. (11 Wall.) 164, 20 L. Ed. 127. It is equally a settled rule of law that the foreign relations of our government are committed by the Constitution to the executive and legislative departments of our government, and what is done by such departments is not subject to judicial inquiry or decision. In re Cooper, 143 U. S. 472, 12 S. Ct. 453, 36 L. Ed. 232; Williams v. Suffolk Ins. Co., 13 Pet. 420, 10 L. Ed. 226; United States v. Palmer, 3 Wheat. 610, 4 L. Ed. 471; The Penza (D. C.) 277 F. 91. Who may be the sovereign de jure or de facto of a territory is a political question; not judicial. Oetjen v. Central Leather Co., supra; Jones v. United States, 137 U. S. 212, 11 S. Ct. 80, 34 L. Ed. 691. The state is a community or assemblage of men, and the government the political agency through which it acts in international relations. State of Texas v. White, 7 Wall. 700, 19 L. Ed. 227; Cherokee Nation v. Georgia, 5 Pet. 52, 8 L. Ed. 25; Foulke, International Law, vol. 1, pp. 62, 82, 102, 192. The foreign state is the true or real owner of its property, and the agency the representative of the national sovereignty. The Sapphire, supra; The Rogdai (D. C.) 278 F. 294.

On July 5, 1917, Mr. Boris Bakhemeteff was recognized by our State Department as the accredited representative of the Russian government — the provisional Russian Government — as successor to the Imperial Russian Government. He continued as such until July 30, 1922. At that date he retired, and the custody of the property of the Russian government, for which Bakhemeteff was responsible, was recognized by the State Department to vest in Mr. Ughet, the financial attaché of the Russian embassy. The Soviet government, which later secured control of the Russian government, was never recognized by our State Department, and ever since the diplomatic status with our government was never altered by the termination of the ambassador's duties. Therefore the provisional Russian Government is the last that has been recognized, and after its ambassador retired its property was considered by the State Department to vest in its financial attaché. Prior to his retirement, and while the accredited ambassador, Mr. Bakhemeteff authorized the suits here considered, which were commenced July 23, 1918.

Various preliminary attacks by motions to dismiss the complaint have been made, and the District Court has in each instance properly denied them, recognizing the principles of law referred to and their application to the fact that there has been no change recognized in the government or agency for Russia by the political branches of our government. Mr. Ughet, by the State Department's determination, is entitled to the custody in the United States of the property of Russia, and as part of that duty he was authorized to continue the suits for the state of Russia. This duty became obvious. It became important to avoid efforts to destroy the right of action as a basis of keeping its property, when motions to dismiss were made and delays occurred which would give rise to the bar of limitation to sue. The question of Mr. Ughet's power under his agency is generally important, because of the change in name of the plaintiff in the action to the state of Russia in substitution of the Imperial Russian Government. We must judicially recognize that the state of Russia survives.

Abatement of the action or a dismissal could only be sustained by reason of the nonexistence of the state, or the action of our government to no longer recognize the agency once accredited and never revoked. The action was properly started by an unquestioned agency. The attorneys and the agency thus employed were obliged to continue until some other government was recognized. It has been recognized that diplomatic agents of one state, while in another, may commence and maintain actions on behalf of their state while they are recognized as such. Republic of Mexico v. De Arangoiz, 12 N. Y. Super. Ct. 643. Proof of the agency or of the diplomat is dependent entirely upon the political fact of the recognition by the political department of the government. The courts may not independently make inquiry as to who should or should not be recognized. The argument of the plaintiff in error is directed entirely toward the court making its own investigation, in expectation that there would be some other government found, either de facto or de jure. This we may not do. Kennett v. Chambers, 14 How. 38, 14 L. Ed. 316; Agency of Canadian Car Co. v. American Can Co. (C. C. A.) 258 F. 363, 6 A. L. R. 1182; Russian Socialist Federated Republic v. Cibrario, 235 N. Y. 255, 139 N. E. 259. If it be a fact that there is a Russian Socialist Federated Republic now in charge of the government of Russia, it would bring no different result here.

Where there is a change of government, foreign states must of necessity judge for themselves whether they will continue their accustomed diplomatic relations with the prince whom they choose to regard as the legitimate sovereign. Wheaton on International Law, p. 332. It matters little whether the recognized state co-operates in it or not. Moore's Digest of International Law, vol. 1, p. 73. It is for the executive and legislative departments to say in what relations any other country stands toward it. Courts of justice cannot make the decision. Agency of Canadian Car Co. v. American Can Co., supra; Moore's International Law, vol. 1, p. 63. Nor does the personal withdrawal of an ambassador affect the relations with the government. Hyde, International Law, vol. 1, p. 731; Moore's Digest of International Law, vol. 4, p....