THE SS DENNY

• Court: U.S. District Court — District of New Jersey
• Writing for the Court: W. Ludlow James and P. A. Beck, both of New York City, for claimants-respondents
• Citation: THE SS DENNY, 1941 AMC 1835, 40 F. Supp. 92 (D. N.J. 1941)
• Decision Date: 22 July 1941
• Parties: THE S. S. DENNY.

40 F. Supp. 92

THE S. S. DENNY.

District Court, D. New Jersey.

July 22, 1941.

COPYRIGHT MATERIAL OMITTED

Lindabury, Steelman, Zink & Lafferty and James L. Lafferty, all of Newark, N. J., and Charles Recht, of New York City, for libellants.

W. Ludlow James and P. A. Beck, both of New York City, for claimants-respondents.

SMITH, District Judge.

This is a possessory suit brought in the name of Lithuanian Baltic Lloyd Ltd. (hereinafter referred to as Baltic Lloyd), formerly a stockholders association of the Republic of Lithuania, and by Agricultural Cooperative Association of Lithuania Lietukis (hereinafter referred to as Agricultural Cooperative Association), a cooperative association of the Republic of Lithuania, to recover possession of the Steamship Denny, and the cargo, respectively. The libel was filed on behalf of the said libellants by one Charles Recht, as attorney-in-fact.

The subject matter of the suit is at present in the custody and possession of the respondent Lithuanian American Import and Export Corporation (hereinafter referred to as the Import and Export Corporation), a corporation of the State of New York, as trustee, appointed by Jonas Budrys, Consul General of the Republic of Lithuania. The said respondent asserts the right to custody and possession for the use and benefit of the said libellants under the said appointment.

The Latvian State Cargo and Passenger Steamship Line (hereinafter referred to as State Steamship Line), a corporation of the Republic of Latvia, Union of Soviet Socialist Republics, has intervened in the suit and claims ownership and right to possession of the vessel. The said claim is founded upon nationalization laws and decrees promulgated thereunder, to which specific reference is hereinafter made.

Findings of Fact.

1. The libellant Baltic Lloyd, prior to November 6, 1940, was a stockholders association or legal entity, organized and existing under the laws of the Republic of Lithuania. It was dissolved on the said date, if not prior thereto, by decree of the Supreme Soviet of the Union of Soviet Socialist Republics, to which specific reference is hereinafter made.

2. The libellant, Agricultural Cooperative Association, prior to November 6, 1940, was a cooperative association or legal entity, organized and existing under the laws of the Republic of Lithuania. It was dissolved on the said date, if not prior thereto, by decree of the Supreme Soviet of the Union of Soviet Socialist Republics, to which specific reference is hereinafter made.

3. The respondent, Import and Export Corporation, is a corporation organized and existing under the laws of the State of New York, and is, and has been since 1938, the commercial representative of both libellants in the United States of America.

4. The intervenor, State Steamship Line, is a legal entity, the exact nature of which is uncertain, organized and existing under the laws of the Republic of Latvia, Union of Soviet Socialist Republics, having been organized on October 25, 1940, under authority of a decree of the Council of People's Commissars of the Union of Soviet Socialist Republics. It definitely appears, however, that the said intervenor, although designated in the statute as a "separate economic organization having the right of a juridical person", is not an independent entity, but is, in fact, an instrumentality of the government of its creation, organized for the sole purpose of taking custody and possession of the steamship lines nationalized pursuant to and in accordance with the laws and decrees to which reference is hereinafter made. The said intervenor is subject to the exclusive control and supervision of the People's Commissariat of Maritime Fleet (Narkommorflot), a division of the government.

5. On or about March 7, 1940, the libellant Baltic Lloyd purchased the Steamship Denny, and at all times thereafter, prior to June 17, 1940, if not thereafter, was the owner of the said vessel. The respondent, Import and Export Corporation, acted as the agent and representative of the said libellant in the purchase of the vessel.

6. In March and April of 1940 the libellant, Agricultural Cooperative Association, in a series of purchases, purchased the cargo, consisting of gasoline, oil, and other commodities, and at all times thereafter, prior to June 17, 1940, if not thereafter, was the owner of the said cargo. The respondent, Import and Export Corporation, acted as the agent and representative of the said libellant in the said purchases.

7. The vessel and cargo, since the time of their acquisition by the respective libellants, have remained in the United States of America.

8. On or about July 21, 1940 (the exact date is not fixed), the "People's Parliament" established the Lithuanian Soviet Socialist Republic and adopted a Soviet government. The Prime Minister assumed the duties of the President of the Republic, and, in a series of decrees promulgated under the authority of the "People's Parliament", announced the nationalization of all commercial and industrial enterprises. It is to be noted, however, that these events were preceded by an invasion of the Republic of Lithuania by the armies of Soviet Russia.

9. Thereafter, on July 26, 1940, pursuant to and in accordance with the Constitution of the Union of Soviet Socialist Republics, there were enacted laws under which all industrial and commercial enterprises were nationalized, and the properties and assets of said nationalized enterprises appropriated by the State. Nationalization decrees were promulgated by the Prime Minister, Acting President of the Republic, pursuant to and in accordance with the said laws.

10. 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.

11. On August 3, 1940, the newly created Lithuanian Soviet Socialist Republic was accepted into the Union of Soviet Socialist Republics.

12. On or about September 5, 1940, pursuant to and in accordance with the nationalization laws, by decree promulgated thereunder, the Council of People's Commissars of the Soviet Socialist Republic of Lithuania directed that the properties and assets, including seagoing vessels, of the libellant Baltic Lloyd, be surrendered and delivered to the People's Commissariat of Maritime Fleet (Narkommorflot), a division of the Government.

13. On or about November 26, 1940, pursuant to and in accordance with the nationalization laws, by resolutions adopted thereunder, the Council of People's Commissars of the Soviet Socialist Republics of Lithuania, organized 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 and undertook the administration of its business affairs.

14. It is suspiciously significant 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.

15. 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 thereunder. This 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 and delivery to the said claimant at the conclusion of these proceedings.

The petition for leave to intervene, filed on behalf of this claimant, is likewise filed by the same Charles Recht as attorney-in-fact.

16. On November 6, 1940, by decree of the Supreme Soviet of the Union of Soviet Socialist Republics, the laws of the Republic of Lithuania were superseded by the codes of the Russian Soviet Federated Socialist Republic. The laws, upon which the existence of the libellants as legal entities depended, were abrogated, thereby effecting their dissolution, if, in fact, this result had not been accomplished prior thereto by the nationalization decrees.

17. The acceptance of the Republic of Lithuania into the Union of Soviet Socialist Republics is not recognized by the United States of America. The sovereignty of the state, Lithuanian Soviet Socialist Republic, created on the territory of the Republic of Lithuania, and the newly established soviet government of that state, have not achieved recognition. The Republic of Lithuania is recognized as the sovereign state, and recognition is accorded its duly accredited representatives.

18. On or about February 20, 1941, Jonas Budrys, Consul General of the Republic of Lithuania, under authority of the Minister of Lithuania to the United States of America, pursuant to and in accordance with the Baltic Civil Code and the Consular Statutes, appointed the Import and Export Corporation trustee of the vessel and its cargo. The appointment authorizes the trustee to retain custody and possession of the vessel and its cargo for the use and benefit of the owners thereof; it further authorizes the trustee to operate the vessel and to account to the owners for the proceeds of such operation.

The vessel and cargo are, in effect, in custodia legis, the custody and possession thereof having been taken...