Golden Budha Corp. v. Canadian Land Co. of America, N.V.

• Decision Date: 22 April 1991
• Docket Number: D,No. 753,753
• Citation: 931 F.2d 196
• Parties: The GOLDEN BUDHA CORPORATION, Plaintiff-Appellant, v. The CANADIAN LAND COMPANY OF AMERICA, N.V., a Corporation, et al., Defendants, The Canadian Land Company of America, N.V., a Corporation; Herald Center Ltd., a Corporation; N.Y. Land (CF8), Ltd., N.V., a Corporation; Manhattan Land Co., Inc., a Corporation; N.Y.L., Inc., Individually and doing business as The New York Land Company; N.Y.L. Properties, Inc., a Corporation, Defendants-Appellees. ocket 90-7676.
• Court: U.S. Court of Appeals — Second Circuit

Page 196

931 F.2d 196

20 Fed.R.Serv.3d 388

The GOLDEN BUDHA CORPORATION, Plaintiff-Appellant, v. The CANADIAN LAND COMPANY OF AMERICA, N.V., a Corporation et al., Defendants The Canadian Land Company of America, N.V., a Corporation Herald Center Ltd., a Corporation; N.Y. Land (CF8), Ltd N.V., a Corporation; Manhattan Land Co., Inc., a Corporation; N.Y.L., Inc., Individually and doing business as The New York Land Company; N.Y.L. Properties, Inc., a Corporation, Defendants-Appellees.

No. 753, Docket 90-7676.

United States Court of Appeals, Second Circuit.

Argued Dec. 11, 1990.

Decided April 22, 1991.

Diane W. Wilson, New York City (George N. Tompkins, Jr., Condon & Forsyth, New York City, Daniel C. Cathcart, Magana, Cathcart, McCarthy & Pierry, Los Angeles, Cal., of counsel), for plaintiff-appellant.

Michael J. Silverberg (Phillips, Nizer, Benjamin, Krim & Ballon, Philip R. Carter, Bernstein & Carter, Martin H. Samson, of counsel), New York City, for defendants-appellees.

Before TIMBERS, KEARSE and MINER, Circuit Judges.

MINER, Circuit Judge:

Plaintiff-Appellant The Golden Budha Corporation ("Appellant") appeals from a judgment entered in the United States District Court for the Southern District of New York (Leval, J.) in favor of defendants-appellees Finding the conversion claim barred by the statute of limitations and the claims for fraud, fraudulent conveyance and imposition of a constructive trust defective for failure to state claims upon which relief may be granted, the district court dismissed the complaint in its entirety. The district court also denied, sub silentio, appellant's request to amend its complaint to replead the claim of fraud with more specificity.

The Canadian Land Company of America, N.V., Herald Center Ltd., N.Y. Land (CF8), Ltd., The Manhattan Land Co., Inc., individually and doing business as The New York Land Company and N.Y.L. Properties, Inc. ("Appellees") dismissing all claims pleaded against them in the complaint. Appellant, a Georgia corporation, is the assignee of the interest of one Roger Roxas in the "Yamashita Treasure," alleged to have been unearthed by Roxas in the Philippines in 1971. Included in the complaint are claims for conversion of the treasure-trove and for fraud, fraudulent conveyance and imposition of a constructive trust relating to the acquisition and disposition of the treasure-trove by appellees. According to the complaint, the appellees are entities that have been under the dominion and control of Ferdinand and Imelda Marcos, former President and First Lady of the Republic of the Philippines, respectively, who allegedly stole the treasure from Roxas in the first instance.

On appeal, appellant argues that dismissal of the conversion claim on statute of limitations grounds was improper in light of its equitable estoppel contention; that the district court erred in requiring proof of insolvency to support a claim of fraudulent conveyance; that dismissal of the constructive trust claim was bottomed improperly upon failure to demonstrate the existence of a fiduciary duty; and that the district court should have granted leave to appellant to plead the fraud claim with more particularity. Appellant also contends that the district court erred in considering matters outside the complaint in dismissing for failure to state claims, thereby treating the motion as one for summary judgment without giving appellant the opportunity to oppose with rebutting evidence. For the reasons that follow, we vacate the judgment of the district court and remand for further proceedings.

BACKGROUND

The provenance of the Yamashita Treasure is shrouded in mystery. According to the complaint, it was "hidden in The Philippines by the Japanese occupation forces prior to the end of World War II and the fall of The Philippines in 1945," and was comprised of gold bullion, precious stones, jewelry, works of art and coins, as well as the enigmatic golden buddha from which appellant derives its misspelled name. Although appellees question whether the treasure ever existed, it is an historical fact that Lieutenant General Tomoyuki Yamashita, "the Tiger of Malaya," served as Commander of Japanese forces in the Philippines during World War II. See W. Manchester, American Caesar: Douglas MacArthur 1880-1964, at 382-83 (1978). General MacArthur accused Yamashita of sacking the City of Manila and its shrines and monuments and urged his execution as a war criminal. Id. at 487. It is interesting to note that, upon his withdrawal from Manila, General Yamashita established headquarters at Baguio, 150 miles north of Manila. Id. Baguio is located not far from the place where the treasure allegedly was recovered and is the city where Roger Roxas resided when the treasure purportedly was taken from him. General Yamashita has been referred to as a forceful and brilliant commander and Japan's most able tactician, best known for defeating the British defenders of Singapore when they outnumbered his forces by more than three to one. Id. at 486. He was executed in the Philippines for his war crimes on February 23, 1946, but there are those who contend that he was innocent of the atrocities with which he was charged, that he was not accorded due process in his trial, and that General MacArthur exercised more than a modicum of "command influence" in the proceedings. Id. at 487-88. Whether or not the treasure purportedly uncovered by Roger Roxas, including In an adventure worthy of Indiana Jones, Roxas unearthed the treasure, which he valued at $600 billion, on January 24, 1971, near a town called Buguias. In a report of investigation submitted by the Committee on Justice of the Senate of the Philippines relative to the forcible taking of the treasure from him, Roxas is described as a merchant who buys old Spanish coins and hunts for treasure. According to the Report, Roxas claims to have found the golden buddha at a location "near Buguias, between Loo and Cadayan Baguio" after he was told to search there by two Japanese nationals. The search was said to have taken seven months, with more than thirty men assisting in the excavation. The money for the expedition allegedly was furnished by a brother and a brother-in-law of Roxas. When the buddha was uncovered, twelve men were required to lift the statue and load it onto a pickup truck. It then was taken to the Roxas home in Baguio City, from which it was alleged to have been forcibly taken by agents of Ferdinand and Imelda Marcos, acting under color of law. Mr. Roxas claims that he was arrested, imprisoned and tortured to reveal the location of the rest of the treasure. After he was released, he says that he was constrained to remain in hiding until President and Mrs. Marcos left the Philippines on February 26, 1986. During his years in hiding, he was unable to learn what had become of the Yamashita Treasure. Roxas contends that he first learned that the Marcoses owned property in New York when their indictment in the Southern District of New York became public on October 22, 1988. He then assigned his rights in the Yamashita Treasure to appellant, a corporation having its principal place of business in Atlanta, Georgia and owned by a long-time friend, Felix Decanay. It is appellant's contention that at least 50% of the treasure-trove became the property of Roger Roxas according to Philippine law.

the golden buddha, was the plundered cache of Tomoyuki Yamashita need not be answered here.

Pleaded in the complaint are four claims, each labelled a "cause of action." The first, designated "Conversion," includes an allegation that the Marcoses seized the Yamashita Treasure from Roxas on April 5, 1971 for their own personal use and benefit, entered into a scheme with the appellees to hide and secrete the treasure and its proceeds and arranged with appellees "to convert said proceeds into both real and personal property located in the city of New York, State of New York and elsewhere." In the second claim, entitled "To Impose A Constructive Trust," a demand is made "[t]hat the defendants, and each of them, be deemed to hold the treasure and all proceeds from the sale, use and investment thereof in trust for plaintiff."

In the claim entitled "Fraud," it is alleged that the appellees conspired with each other and with the Marcoses to hide the treasure and its proceeds by "setting up and controlling shell corporations in foreign countries and elsewhere so as to hold title to certain real and personal property belonging to plaintiff." The proceeds are said to have been invested in New York real estate, including the Crown Building, the Herald Center, Forty Wall Street and Two Hundred Madison Avenue, as well as in real estate located in Rome and Honolulu and in various foreign and domestic bank accounts. Finally, in a claim designated "Fraudulent Conveyances," appellant alleges that appellees "disposed of portions of the Yamashita Treasure to third parties including relatives, friends, and corporations owned and controlled by the defendants, and each of them, all for inadequate consideration and all for the purpose of permanently depriving the plaintiff of its property." Appellees are five of the six defendants served with the summons and complaint in this action. The sixth defendant, California Overseas Bank, was dismissed on its motion for want of personal jurisdiction.

The appellees moved to dismiss the complaint before service of an answer. Applying the three-year statute of limitations mandated by N.Y.Civ.Prac.L. & R. Sec. 214(3) & (4) (McKinney 1990), the district court dismissed the conversion claim, holding that Roxas' claim accrued in 1971 when he became aware that his property was taken In dismissing the claim for fraud, the district court noted the lack of any "allegation of any representation, or act amounting to a representation, made to Roxas which was deceptive and on which plaintiff relied." The district court saw the fraud claim as "a...