Lietukis v The Denny

• Jurisdiction: United States
• Court: U.S. Court of Appeals — Third Circuit
• Judgment Date: 21 April 1942
• Docket Number: Case No. 18
• Date: 21 April 1942

United States, District Court, District of New Jersey.

Circuit Court of Appeals, Third, Circuit.

(Latvian State Cargo & Passenger Steamship Line, Intervener.)

(Smith, District Judge.)

(Maris, Jones, Goodrich, Circuit Judges.)

Case No. 18

The Denny.

Agricultural Co-operative Association of Lithuania Lietukis et Al.

and

The Denny et Al.

Recognition — Of Absorption of States — Effects of Non-Recognition — Relevance of Actual Exercise of Sovereignty — Incorporation of Lithuania by Soviet Russia.

The Facts.—This was a possessory libel brought in the name of Lietuvos Zemes Ujio Kooperatyvu Sajunga Lietukis (Agricultural Co-operative Association of Lithuania Lietukis) and Lietuvos Baltijos Lloydas (Lithuanian Baltic Lloyd, Limited) by one Charles Recht, as attorney-in-fact, against the s.s. Denny and her cargo, and against the Lithuanian-American Import and Export Corporation (Litamcor), a New York corporation presently holding custody and possession of the vessel and cargo. The Latvian State Cargo and Passenger Steamship Line, “a corporation of the Republic of Latvia, Union of Socialist Soviet Republics”, intervened claiming ownership and a right to possession of the vessel, based upon nationalization laws and decrees. The facts are further developed in the opinions.

Held (per Smith, District Judge): that the libel must be dismissed.

The District Court found that both libellants were, prior to November 6,1940, Lithuanian associations organized under the laws of the Republic of Lithuania prior to the Soviet occupation of Lithuania, but that both had been “dissolved on the said date, if not prior thereto” by Soviet decrees; that, at least prior to June 17, 1940, Lithuanian Baltic Lloyd was the owner of the vessel, and Lietukis was owner of the cargo; that Litamcor was their American agent; that in July 1940, subsequent to the invasion of Lithuania by the armies of Soviet Russia, a “People's Parliament” established a Lithuanian Socialist Soviet Republic which, in accordance with the Constitution of the Union of Soviet Socialist Republics, decreed the nationalization of all commercial and industrial enterprises and the expropriation of their properties and assets; that “pursuant to and in accordance with the nationalization decrees, the libellants were divested of all right, title and interest in and to their properties and assets, and commissars were appointed to administer their business affairs”.

The Court found further that “on August 3, 1940, the newly created Lithuanian Socialist Soviet Republic was accepted into the Union of Socialist Soviet Republics”; that subsequent to this date, the Lithuanian Socialist Soviet Republic directed libellant Lithuanian Baltic Lloyd to surrender its properties, assets and vessels to “the People's Commissariat of Maritime Fleet (Narkommorflot), a division of the Government” and established the “Organizing Bureau for Lithuanian Republic's Consumers Association Society, which organization appropriated the properties and assets of the libellant Agricultural Cooperative Association [Lietukis] and undertook the administration of its business affairs”. It was “suspiciously significant”, added the Court, “that the nationalization decrees hereinabove referred to, although they divested the libellants of all right, title and interest in and to their properties and assets, and deprived their officers of all authority in the administration of their business affairs, preserved the ‘validity’ of the signatures of those officers who, prior thereto, had been authorized to act for and on behalf of the libellants. This observation is made at this time because the libel is filed by one Charles Recht, as attorney-in-fact, whose authority is predicated on powers of attorney, which are offered as instruments ‘voluntarily’ executed by the officers of the libellants. These facts are of further significance when consideration is given to the claim asserted by the State Steamship Line. The right, title and interest of the said claimant is predicated entirely upon the nationalization decrees, hereinabove referred to, and the rights acquired there-under. The claimant recognizes that the legal title and the right to possession of the vessel may be vested in the libellants, but only for the purpose of insuring surrender...