Bernstein v. Van Heyghen Freres Societe Anonyme, No. 216

• Court: United States Courts of Appeals. United States Court of Appeals (2nd Circuit)
• Writing for the Court: L. HAND, SWAN, and CLARK, Circuit
• Citation: 163 F.2d 246
• Parties: BERNSTEIN v. VAN HEYGHEN FRERES SOCIETE ANONYME.
• Decision Date: 13 October 1947
• Docket Number: Docket 20521.,No. 216

163 F.2d 246 (1947)

BERNSTEIN
v.
VAN HEYGHEN FRERES SOCIETE ANONYME.

No. 216, Docket 20521.

Circuit Court of Appeals, Second Circuit.

July 10, 1947.

Writ of Certiorari Denied October 13, 1947.

William S. Bennet and Bennet, House & Couts, all of New York City (Victor House, Bernard A. Finkel, and Sidney I. Liebowitz, all of New York City, of counsel), for appellant.

Stephen P. Duggan, Jr., and Simpson Thacher & Bartlett, all of New York City (Richard B. Persinger and Frederick B. Sussman, both of New York City, of counsel), for appellee.

The American Jewish Congress filed a brief for the appellant as amicus.

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

Writ of Certiorari Denied October 13, 1947. See 68 S.Ct. 88.

L. HAND, Circuit Judge.

The plaintiff appeals from an order, quashing a writ of attachment, and dismissing

163 F.2d 247

the complaint, in an action originally brought in the state court against the defendant, a Belgian corporation. The warrant attached a debt owed by another Belgian corporation to the defendant, which was served by publication completed on July 23, 1946. The defendant removed the case to the district court on August 10, 1946, and appeared specially to vacate the attachment and to dismiss the complaint. The complaint alleged that the plaintiff was the owner of all the shares of stock of a German corporation, commonly known as the "Arnold Bernstein Line," which in turn was the owner of a ship called the "Gandia." "In January 1937 the plaintiff was taken forcibly into custody by Nazis officials in Germany and imprisoned in a jail in Hamburg, Germany." During the time of his imprisonment he had reasonable cause to believe and did believe that the "said Nazi officials had designs on his life as well as liberty and business interests." At some time not stated these "Nazi officials" by means of duress and unlawful threats of bodily harm, indefinite imprisonment and death, as well as of business ruin, compelled the plaintiff to execute documents, which purported to transfer all the shares of "Arnold Bernstein Line" to one, Marius Boeger. Boeger took possession of all the assets of the Line, including the ship, which with its equipment, was "transferred to and taken into possession by the defendant, unlawfully and without fair and adequate consideration." Before the defendant came into possession and control of the vessel, it had learned that the plaintiff was a Jew and that he had been imprisoned, and for over two and one-half years had been at the mercy of "said Nazi officials" whose general policies of elimating so-called non-Aryans from German life, and confiscating their property were matters of general knowledge. The defendant also knew, or should have known that plaintiff had been compelled by threats of bodily harm, indefinite imprisonment and death, as well as business ruin, to execute the transfer to Boeger. This was the first count. The second count demanded damages for the detention of the vessel; the third was for the profits derived by the defendant from her operation; and the fourth was to recover the proceeds of insurance which the defendant had collected in July 1943, for the sinking of the vessel "in the early part of 1942."

The plaintiff, in opposition to the motion to vacate the attachment, filed an affidavit in which he alleged that "on January 25, 1937 I was arrested by the Nazi Gestapo, and from that day until the latter part of July 1939 I was continually in the custody of and imprisoned by the Nazis." He alleged that various charges were made against him during this time for violation of "certain German foreign exchange laws, and from time to time I was told and led to believe by Nazi officials, by my then attorneys in Hamburg and by others that unless I surrendered my shipping interests to a `trustee' designated by the Nazis, I would be kept imprisoned indefinitely, my remaining property would be confiscated and my life and the lives of my immediate family would be imperilled." Further he alleged that he was a Jew, and that the Nazis were carrying on "a deliberate and openly avowed program of eliminating so-called non-Aryans from German social and economic life. I believed that I and my family were in real danger unless I acceded to Nazi demands, and I signed documents purporting to assign and transfer my ownership and control of the Arnold Bernstein Line to a Nazi designee, one Marius Boeger, * * * while still in prison." Even after he had signed these documents he alleged that he had not been released until July, 1939, when his friends paid a "ransom" and he was allowed to leave Germany. The affidavit concluded by alleging that he had later learned that the ship which was an asset of the Line, had been acquired by the defendant "from the Nazi `trustee' in June, 1939"; that she had passed on time charter to the British Minister of War Transport during the war; had been sunk in 1942; that insurance amounting to 100,000 pounds had been paid for the loss; and that this had been collected by another Belgian corporation, which held it on the defendant's account. It was this debt against which the plaintiff levied the attachment. The judge quashed the attachment and dismissed the complaint upon the ground that the claim was for a wrong

163 F.2d 248

done by "the German Government under the Nazi regime," and that, as the confiscation was within German territory, it was "not subject to review in our courts." The more important question on this appeal is whether the determination of the validity of acts of the German Government in 1937 is within the jurisdiction of a court of the State of New York; and preliminarily, whether the papers raise that question with sufficient definiteness at the present stage of the litigation to make a decision necessary. We will take these up in reverse order

The New York Civil Practice Act¹ requires a plaintiff, if he would attach the property of a defendant, to "show that a cause of action * * * exists against the defendant"; and it is the New York law which determines the validity of attachments in the district court.² When the facts upon which the plaintiff's claim depends are in dispute, the courts of New York have been liberal in not requiring the plaintiff to present an unassailable case; and they have also examined his right in law with less jealousy than upon a motion to dismiss the complaint for insufficiency in law.³ The controlling principle has been stated with some variations, among which the most extreme is that the papers must be "hopelessly bad,"⁴ if the attachment is to fail. However, the authoritative expression, we think, is that the attachment will not stand, if the papers upon which it "was based * * * clearly indicate that the plaintiffs must ultimately fail."⁵ This, besides being the last word of the highest court, has been several times affirmed in the lower courts.⁶ We accept it as our guide.

The plaintiff's allegations as to the defendant's notice of the duress which compelled him to sign the transfer, are exceedingly fragile, and would not survive challenge under a number of New York decisions. Nevertheless, we shall not dispose of the appeal upon the theory that he should have produced more persuasive evidence. After all, it is difficult upon an issue, whose support the party almost in-evidently must draw from his opponent, to do much more than state circumstances from which an inference may be based; and we shall take it that the papers are enough in this respect. If so, 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. But that is not all. In his affidavit he swore that he "was arrested by the Nazi Gestapo and from that day * * * was continuously in the custody of and imprisoned by the Nazis"; that his pretended offence was the "violation of certain German foreign exchange laws"; and that Boeger was a "trustee," designated by the Nazis. Thus when called upon to clarify the meaning of his complaint the plaintiff left no question that he meant to allege that he had been a victim of that governmental persecution of Jews, which went so far to build up the universal execration of the regime.

The brief of the amicus argues that, even so, the acts of the "Nazis officials"

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were unlawful under the laws of the Reich itself, because it is consistent with the record that they may have forced the plaintiff to transfer the shares before December 1938, and it was only in that month that any laws were passed, legalizing the confiscation of the property of Jews because of their race or religion. However, even though we assume that a German court would have held the transfer unlawful at the time it was made, that would be irrelevant. 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.⁷ We have held that this was a necessary corollary of decisions of the Supreme Court,⁸ and if we have been mistaken, the Supreme Court must correct it

Thus the case is cleared for the second question: whether since the cessation of hostilities with Germany our own Executive, which is the authority to which we must look...