Bernstein v. NV NEDERLANDSCHE-AMERIKAANSCHE, ETC.

• Decision Date: 05 March 1948
• Citation: 76 F. Supp. 335
• Parties: BERNSTEIN v. N. V. NEDERLANDSCHE-AMERIKAANSCHE STOOMVAART-MAATSCHAPPIJ (CHEMICAL BANK & TRUST CO., Third-Party Defendant).
• Court: U.S. District Court — Southern District of New York

76 F. Supp. 335

BERNSTEIN v. N. V. NEDERLANDSCHE-AMERIKAANSCHE STOOMVAART-MAATSCHAPPIJ (CHEMICAL BANK & TRUST CO., Third-Party Defendant).

District Court, S. D. New York.

March 5, 1948.

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Bennet, House & Couts, of New York City (William S. Bennet, Victor House, Bernard A. Finkel and Seymour, Altmark, all of New York City, of counsel), for plaintiff.

Burlingham, Veeder, Clark & Hupper, of New York City (John L. Galey, of New York City, of counsel), for defendant and third-party plaintiff.

Shearman & Sterling & Wright, of New York City (John A. Wilson, MacIlburne Voorhies, and William F. Hamilton, all of New York City, of counsel), for third-party defendant.

RYAN, District Judge.

Four motions made in this action at law were presented and argued at the same hearing.

(1) Defendant, Holland-America Line, moved for judgment on the pleadings pursuant to Rule 12(c) of the Federal Rules of Civil Procedure, 28 U.S.C.A. following section 723c.

(2) Third-party defendant, Chemical Bank & Trust Company, moved also under Rule 12(c) to dismiss the third-party complaint

of defendant and third-party plaintiff, Holland-America Line, and by that motion challenges the sufficiency of plaintiff's complaint.

After notice of these motions, plaintiff served notice of "cross-motion" in which—

(3) Plaintiff moved for leave to serve a "second amended complaint," and

(4) Plaintiff moved for permission to intervene in this action in his capacity as temporary receiver of the assets of the Red Star Linie G.m.b.H. (hereafter called Red Star Line).

This action was commenced on June 1, 1945. The original complaint contained four causes of action. The fifth cause of action was first set forth in the amended complaint which was served on August 10, 1946, after order of the court had been made permitting service of an amended complaint.

We are led at the outset to a study of this amended complaint (hereafter referred to as the complaint).

Plaintiff bases his causes of action, in substance, upon the alleged unlawful taking in the month of June, 1939, in Germany, of certain property particularly the vessels S. S. Pennland and S. S. Westernland, and all the other assets of the Red Star Line, A German limited liability company. Plaintiff alleges that he "was and still is the sole owner and entitled to the immediate possession of the entire capital shares of Red Star Linie G.m.b.H.," which shares "represented the full and exclusive ownership of said Red Star Line, and as such the plaintiff was and is solely entitled to the assets of Red Star Line in any liquidation thereof."

The complaint further alleges that plaintiff "was taken forcibly into custody by Nazi officials of Germany and imprisoned in a jail in Hamburg, Germany," and that "during the entire period of his imprisonment the plaintiff was led and had reasonable cause to believe, and did believe, that said Nazi officials had designs on his life as well as liberty and business interests." And continues that "while still so imprisoned, was compelled by said Nazi officials, by duress and unlawful threats of severe bodily harm, indefinite imprisonment and death, as well as business ruin, to execute documents purporting to transfer and to sanction the transfer of said entire capital shares of Red Star Line to one Marius Bœger." And that "while still so imprisoned the plaintiff was told and led to believe by said Nazi officials and others and had reasonable cause to believe, and actually did believe, that he would be put to death, subjected to serious bodily injury, or imprisoned indefinitely, as well as ruined in his business, unless he executed the said documents, and he executed such documents by reason of and under such circumstances," and that the "documents, accordingly, were and are null and void and of no force and effect."

The complaint further alleges that "as a consequence of the execution of such documents and the authority purportedly conferred thereby," Marius Bœger "took possession and control of Red Star Line and undertook the liquidation and the disposition of the assets thereof, and pursuant thereto in or about June 1939 the said assets of Red Star Line * * * were transferred to and taken into possession by the defendant Holland-America Line illegally and without fair and adequate consideration * * * while the plaintiff was still imprisoned. * * *" And, that Holland-America Line "came into possession and control of the said assets of Red Star Line with full knowledge of plaintiff's imprisonment," and "knew or should have known that the plaintiff had been compelled by duress and unlawful threats of severe bodily harm, indefinite imprisonment and death, as well as business ruin, into executing the said documents * * *."

These allegations are repeated in all five causes of action set forth in the complaint. And, plaintiff demands judgment "for the possession of said assets of Red Star Line or for the sum of $3,300,000.00, the value thereof in case possession thereof can not be given to plaintiff, on the First, Second and Third causes of action. * * *"

In the first cause of action, plaintiff claims unlawful conversion of said assets of Red Star Line by Holland-America Line; in the second, plaintiff sues for the wrongful detention of said property; in the third, plaintiff claims failure to return property on demand; in the fourth, plaintiff sues for $2,500,000 for the loss of the use of said assets while unlawfully detained; and in the fifth cause of action, plaintiff sues for the proceeds of two ships — the insurance on the S. S. Pennland, which was sunk in April, 1941, and the sale of the S. S. Westernland, which it is alleged Holland-America Line sold in January, 1943. Plaintiff also demands earnings, profits and benefits received by the latter from the use of said assets. In this last cause of action the amount claimed is $3,660,000.

Here, it should be noted that within a few days after this action was begun, plaintiff instituted suit in the Supreme Court of the State of New York, New York County against Van Heyghen Freres, S. A., a Belgian corporation, for damages arising from the alleged unlawful taking of another vessel belonging to a certain German limited liability company of which he alleged he was sole owner of all the shares. The action was removed to this court and upon motion, subsequently made by defendant in that case, the complaint was dismissed. On appeal to the Circuit Court of Appeals that decision was affirmed. Bernstein v. Van Heyghen Freres, S. A., 2 Cir., 163 F.2d 246. A petition filed with the United States Supreme Court for certiorari was denied. 332 U.S. 772, 68 S.Ct. 88.

Defendant submits as part of its moving papers, a copy of the complaint in that action which was brought by plaintiff as sole owner of the entire capital shares of Arnold Bernstein Schiffahrtgesellschaft m.b.H., a German limited liability company, against Van Heyghen Freres Societe Anonyme, defendant. The allegations in the Van Heyghen complaint are substantially the same as those contained in the complaint herein. Many of the material allegations are identical.

Paragraphs 2 and 3 of the instant complaint are precisely the same as paragraphs 2 and 3 of the Van Heyghen complaint, save for the names of the German companies involved. The allegations of alleged duress exercised on plaintiff in paragraphs 8, 9 and 10 are the same as the allegations in paragraphs 4, 5 and 6 of the Van Heyghen complaint. In the latter the acts of duress are ascribed to "Nazi officials in Germany," while in complaint herein they are ascribed to "Nazi officials of Germany." Paragraph 7 of the Van Heyghen complaint is the same as paragraph 11 of this complaint except for a few inconsequential changes in the wording. All the allegations of paragraph 12 in the complaint herein are contained in paragraph 8 of the Van Heyghen complaint, the only difference being that in the latter plaintiff's Jewish faith and the policy of eliminating so-called non-Aryans from the German Reich is alleged. Paragraph 9 of this latter complaint is the same as paragraph 13 of the instant complaint.

In both the first cause of action is for conversion. In the Van Heyghen complaint the second cause of action embodies the essential allegations of the second, third and fourth causes of action of the Holland-America Line Complaint. The third and fourth causes of action of the Van Heyghen complaint are essentially the same as the fifth cause of action of the complaint herein. In the former the plaintiff demands judgment for damages merely, but here plaintiff demands judgment for possession of his property as well as damages.

It was said by the Circuit Court of Appeals in Bernstein v. Van Heyghen Freres, S. A., supra, at page 248 of 163 F.2d:

"* * * there is no dispute about any of the facts except as to the meaning of the phrase, `Nazi officials,' which recurs a number of times in the complaint and the plaintiff's supporting affidavit. Does that phrase in the context in which the plaintiff used it `clearly indicate' that the duress under which he acted was imposed by persons who were acting, or who purported to be acting, as officials of the Third Reich? Little can be added, we think, to the cogency of the language itself. The plaintiff does not explain what else he could have meant by the phrase; who else but an accredited agent of the government would have `imprisoned' him `in a jail in Hamburg'; or who else would have proceeded by means of a `Nazi designee' who later sold to the defendant."

And the court further said at, page 249 of 163 F.2d:

"We have repeatedly declared, for over a period of at least thirty years, that a court of the forum will not undertake to pass upon the validity under the municipal law of another state of the acts of officials of that state, purporting to act as such. We have held that this was a necessary corollary of decisions of the Supreme Court, and if we have been...