Behre v. Anchor Ins. Co. of New York, 100.

• Decision Date: 07 January 1924
• Docket Number: 100.
• Citation: 297 F. 986
• Parties: BEHRE et al. v. ANCHOR INS. CO. OF NEW YORK.
• Court: U.S. Court of Appeals — Second Circuit

297 F. 986

BEHRE et al. v. ANCHOR INS. CO. OF NEW YORK.

No. 100.

United States Court of Appeals, Second Circuit.

January 7, 1924

The plaintiff Ernst Behre is a citizen of Russia, but a resident of the republic of Germany. Herman and Franz Mutzenbecher are citizens of the republic of Germany and residents of the city of Hamburg, as was Carl Christian Stahl at the time of his death. They were partners in the business of insurance, with their principal office and place of business in Hamburg Germany. The partnership dated from December 4, 1907. In August, 1922, Stahl died, and Franz Mutzenbecher was appointed executor of his will and acted as such. Under the German Commercial Code a partnership is terminated by the death of one of its members, unless the contract of partnership otherwise provides. In the case of the partnership herein involved the contract provided that in case of the death of one of the partners the partnership was to continue between the surviving partners, and at all times since the death of Stahl the plaintiffs have continued the business of the partnership.

This suit was commenced prior to Stahl's death, and in February, 1923, his death was suggested upon the record, and thereupon by an order duly entered the cause was continued by the plaintiffs as the surviving and present partners of the firm of H. Mutzenbecher, Jr. The Anchor Insurance Company of New York, as its name implies, is a New York corporation. It is engaged in conducting a fire and marine insurance business. The Jakor Insurance Company of Moscow, Russia exists under and by virtue of the laws of the republic of Russia, with general power to transact the business of insurance, and with authority to establish branch offices and places of business in other countries.

The plaintiffs, together with the said Stahl, now deceased, on June 28, 1922, filed a bill of complaint in the court below against the Jakor Insurance Company, wherein they prayed an accounting against the defendants for commissions on reinsurances effected by the plaintiffs for the Jakor Insurance Company under an alleged agreement therefor between it and the plaintiffs, liability whereon was assumed by the Anchor Insurance Company. The bill alleged the making of the agreement and that the plaintiffs procured the appointment of a United States manager for the Jakor Insurance Company, and entered it in the United States, and obtained agreements for reinsurance for it with other insurance companies. It further alleged that the plaintiffs worked the business by doing the mapping and carding of the risks reinsured and received the agreed commissions from the Jakor Insurance Company, except a part allowed to accumulate and remain in the United States as a credit to the plaintiffs, in order to strengthen the company's financial condition in the United States, up to the time of the European War, when communications became difficult, and as a result there were further accumulations of commissions in the United States.

The Alien Property Custodian, on November 9, 1918, and at subsequent times, seized certain specific funds as the property of the plaintiffs, and the equivalent of a part of the said accumulated commissions, the exact amount of which the bill alleged the plaintiffs did not know. The bill further alleged that the Jakor Insurance Company had presented a claim to the United States government for the said funds alleging that they were its property. The plaintiffs alleged that they were entitled to have the United States government hold the said funds as their property. The bill alleged that the Jakor Insurance Company had transferred its United States business, with all the assets, to the defendant herein, the Anchor Insurance Company of New York which assumed the liabilities, including the one to the plaintiffs herein for commissions.

The bill then asked for an accounting for the commissions subject to credit for all sums paid to the Alien Property Custodian as the property of the plaintiffs, provided the sums shall be properly adjudged their property, and for the payment of such sums as may be found due to the plaintiffs, and for a decree that the defendants account periodically to them for any sum becoming due hereafter by the terms of the agreement. The Jakor Insurance Company was, by an order duly made on August 24, 1922, dismissed without prejudice from the cause. The defendant, Anchor Insurance Company, entered its appearance on June 29, 1922, and served its answer on August 22, 1922.

The plaintiffs allege that after the original bill herein was filed the Jakor Insurance Company assigned or purported to assign its claim against the United States government to the defendant, the Anchor Insurance Company; that the said defendant has actively renewed its claim, and has pressed for the allowance of the claim presented to the United States government. The plaintiffs allege that the defendant disputes the correctness of the determination of the Alien Property Custodian, that the funds taken over by him belong to H. Mutzenbecher, Jr., that is, to the plaintiffs, and alleges that a very large part, if not all, of the said fund was the property of the Jakor Insurance Company, and claims under its alleged assignment, and that H. Mutzenbecher, Jr., had no interest of any kind therein. The plaintiffs aver on information and belief that the money and property so seized and taken over was and is their money and property, and that the said money and property was and is

held for them by the said Alien Property Custodian as their trustee; that the defendant at all times and before the said alleged assignment had full knowledge and notice of the plaintiffs' claim to, and interest in, the said fund.

Then it is alleged that the Attorney General of the United States, by virtue of the power and authority vested in him by the Trading with the Enemy Act and the amendments thereto, and executive orders and proclamations thereunder, is about to order, or has ordered, the payment to the Anchor Insurance Company of the said fund, amounting to $213,000.08, against the plaintiffs' protest, and that the Alien Property Custodian, without the plaintiffs' consent, is about to pay over, or has paid over, to the said Anchor Insurance Company the said fund of $213,000.08 held by him as the plaintiffs' trustee. It is further alleged that the plaintiffs believe and aver that the defendant intends to transmit the said fund abroad to the Jakor Insurance Company of Russia, so that the plaintiffs will be unable to follow or recover it, unless the defendant is restrained by injunction from so dealing with the said fund.

The supplemental bill in conclusion asks that the fund of $213,000.08 seized by the Alien Property Custodian as the property of H. Mutzenbecher, Jr., be decreed and determined to be the fund and property of the plaintiffs, and be ordered to be paid over to them. It also asks that the defendant be restrained during the pendency of this suit from paying out, transferring, concealing, removing from the United States, or otherwise disposing of the fund of $213,000.08, received from the Alien Property Custodian. They also ask an accounting and the costs and disbursements of the suit.

On February 14, 1923, an order was made requiring defendant to show cause why the preliminary injunction prayed for in the supplemental bill of complaint should not issue; and on April 13, 1923, the motion came on to be heard upon the supplemental bill and affidavits in opposition to and in support of the motion, and an injunction pendente lite was issued on May 16, 1923. From the order granting the injunction the defendant appealed to this court.

The president of the defendant corporation submitted an affidavit, duly verified by him, at the hearing upon the motion for an injunction. That affidavit set forth the relations in detail which existed between the Jakor Insurance Company of Russia, and the copartnership of H. Mutzenbecher, Jr., of Hamburg, Germany, as the agent of that company in the conduct of its insurance business in this country, and also the purchase by the defendant of the assets of the United States branch of the Jakor Insurance Company, and its assumption of the liabilities of that company, and it declares that at the time it made this purchase and assumed these liabilities, which was in January, 1922, and not until this suit was commenced in June, 1922, did it have any knowledge or notice of the existence of any claim of any kind in favor of the plaintiffs.

Barker, Donohue, Anderson & Wylie, of New York City (Ira L. Anderson, and Joseph E. Worthington, Jr., both of New York City, of counsel), for appellant.

Carl L. Schurz, of New York City (Hartwell Cabell, of New York City, of counsel), for appellees.

Before ROGERS, MANTON, and MAYER, Circuit Judges.

ROGERS Circuit Judge (after stating the facts as above).

The...