Zimmerman v. Hicks

• Decision Date: 04 May 1925
• Docket Number: No. 286,287.,286
• Citation: 7 F.2d 443
• Parties: ZIMMERMAN et al. v. HICKS, Alien Property Custodian, et al. (two cases).
• Court: U.S. Court of Appeals — Second Circuit

7 F.2d 443 (1925)

ZIMMERMAN et al. v. HICKS, Alien Property Custodian, et al. (two cases).

Nos. 286, 287.

Circuit Court of Appeals, Second Circuit.

May 4, 1925.

Stockton & Stockton, of New York City (Joseph M. Hartfield, Hamilton Vreeland, Jr., K. E. Stockton, and Aron Steuer, all of New York City, of counsel), for plaintiffs.

Dean Hill Stanley, Sp. Asst. Atty. Gen., and Wm. Hayward, U. S. Atty., of New York City, for Alien Property Custodian and Treasurer of the United States.

Peaslee, Brigham & Gennert, of New York City (Thomas G. Haight, of Jersey

City, N. J., and Amos J. Peaslee, of New York City, of counsel), for Deutsche Bank.

Louis Manheim and Samuel R. Wachtell, both of New York City, for Wiener Bank.

Spier Whitaker, of New York City, amicus curiæ as to the rate of exchange applicable.

Before HOUGH, MANTON, and HAND, Circuit Judges.

HOUGH, Circuit Judge (after stating the facts as above).

There are several matters discussed at bar as to which discussion in this court may cease; we have expressed views which will remain in force until corrected by higher authority.

War between the United States and Germany ceased on July 2, 1921. Re Miller (C. C. A.) 281 F. 764; c. f. Swiss National Ins. Co. v. Miller, 266 U. S. 42, 45 S. Ct. 213, Feb. 2, 1925. Undoubtedly commercial relations were more or less re-established for approximately two years before that date, but that fact does not affect the material point that until July 2, 1921, a German was an alien enemy.

The date at which exchange is to be computed we have covered in Guiness v. Miller (C. C. A.) 299 F. 538, and sufficiently assigned reasons for our holding.

That the provisions of the Versailles Treaty do not affect nor relate to claims like that against the Deutsche Bank, we have also held in the Guiness Case, supra.

It is fundamental in both these suits to ascertain and declare the legal relation between plaintiffs and the defendant banks. It was admittedly that of depositor and banker, and there is no evidence that the nature of that common relation is not the same under German, Austrian, and American law.

It is therefore so plain as to need no citation in support that the relation of parties was merely that of debtor and creditor, the debt due on demand, and therefore not due until demand was made; and a demand is "a requisition or request to do a particular thing specified under a claim of right on the part of the person requesting." 3 Bouv. Law Dict. p. 2904.

It is useful next to inquire by the law of what country the mutual rights and privileges of the parties are to be determined. We have no doubt that by specific agreement the duties and obligations of the banks were to be determined by German and Austrian law, respectively. But, even without such agreement, since each bank had in effect made a contract to pay on demand at its own banking house, the same result is reached by applying the familiar rule of the law of the place where the contract is to be performed; i. e. Germany or Austria, as the case might be. London Assurance v. Companhia, 167 U. S. 149, 17 S. Ct. 785, 42 L. Ed. 113.

The above holding is made in both of these suits, though, as will appear, it is not from our standpoint material in respect of the Deutsche Bank, but it does greatly affect the claim against the Wiener Bank.

The question which most practically and very vitally affects these suits, and probably many others, may be thus put: What did the banks own plaintiffs? In answer we think it plain that they did not owe a certain number of units of any fixed value, nor could their debts be expressed in any universal currency; they owed only certain quantities of the thing called money within that political subdivision of the world in which the bank existed and to the laws of which it was subject. Therefore neither of these banks ever owed the plaintiffs any dollars. The only method of describing their debts is to speak of so many marks or kronen, which, like dollars, are merely legal and financial entities varying in exchange or purchasing power for reasons with which no court has any concern and over which it has no power or authority.

Therefore all that any American court can do is to translate a demand for marks or kronen into the dollars with which alone can we deal; and we must make that translation according to the facts as proven at a time fixed by law, and what that time is we have declared in the Guiness Case, supra.

Since, therefore, there can be no breach of contracts such as those at bar until a demand and refusal, and no assessment of damages in dollars until such demand, the question of fact is acute: When did plaintiffs make a demand upon these banks or either of them?

We may premise this inquiry by stating our agreement with the lower court in rejecting plaintiff's contention that their rights were created by the declaration of war on April 6, 1917; i. e. that such declaration was equivalent to a demand and refusal. We feel assured that the declaration had no such effect. Of course a declaration of war could do no more than the war itself, and that war does not affect the relations of parties to an executed contract, but merely suspends the remedies available thereunder, was fully held in Hanger v. Abbott, 6 Wall. 532, 18 L. Ed. 939.

It is indeed obvious that, if the results of the declaration of April 6,...