The opinion of the court was delivered by: RYAN
Four motions made in this action at law were presented and argued at the same hearing.
(1) Defendant, Holland-America Line, moved for judgment on the pleadings pursuant to Rule 12(c) of the Federal Rules of Civil Procedure, 28 U.S.C.A.following section 723c.
(2) Third-party defendant, Chemical Bank & Trust Company, moved also under Rule 12(c) to dismiss the third-party complaint of defendant and third-party plaintiff, Holland-America Line, and by that motion challenges the sufficiency of plaintiff's complaint.
After notice of these motions, plaintiff served notice of 'cross-motion' in which --
(3) Plaintiff moved for leave to serve a 'second amended complaint,' and
(4) Plaintiff moved for permission to intervene in this action in his capacity as temporary receiver of the assets of the Red Star Linie G.m.b.H. (hereafter called Red Star Line).
This action was commenced on June 1, 1945. The original complaint contained four causes of action. The fifth cause of action was first set forth in the amended complaint which was served on August 10, 1946, after order of the court had been made permitting service of an amended complaint.
We are led at the outset to a study of this amended complaint (hereafter referred to as the complaint).
Plaintiff bases his causes of action, in substance, upon the alleged unlawful taking in the month of June, 1939, in Germany, of certain property particularly the vessels S.S. Pennland and S.S. Westernland, and all the other assets of the Red Star Line, A German limited liability company. Plaintiff alleges that he 'was and still is the sole owner and entitled to the immediate possession of the entire capital shares of Red Star Linie G.m.b.H.,' which shares 'represented the full and exclusive ownership of said Red Star Line, and as such the plaintiff was and is solely entitled to the assets of Red Star Line in any liquidation thereof.'
The complaint further alleges that plaintiff 'was taken forcibly into custody by Nazi officials of Germany and imprisoned in a jail in Hamburg, Germany,' and that 'during the entire period of his imprisonment the plaintiff was led and had reasonable cause to believe, and did believe, that said Nazi officials had designs on his life as well as liberty and business interests.' And continues that 'while still so imprisoned, was compelled by said Nazi officials, by duress and unlawful threats of severe bodily harm, indefinite imprisonment and death, as well as business ruin, to execute documents purporting to transfer and to sanction the transfer of said entire capital shares of Red Star Line to one Marius Boeger.' And that 'while still so imprisoned the plaintiff was told and led to believe by said Nazi officials and others and had reasonable cause to believe, and actually did believe, that he would be put to death, subjected to serious bodily injury, or imprisoned indefinitely, as well as ruined in his business, unless he executed the said documents, and he executed such documents by reason of and under such circumstances,' and that the 'documents, accordingly, were and are null and void and of no force and effect.'
The complaint further alleges that 'as a consequence of the execution of such documents and the authority purportedly conferred thereby,' Marius Boeger 'took possession and control of Red Star Line and undertook the liquidation and the disposition of the assets thereof, and pursuant thereto in or about June 1939 the said assets of Red Star Line * * * were transferred to and taken into possession by the defendant (Holland-America Line) illegally and without fair and adequate consideration * * * while the plaintiff was still imprisoned. * * * ' And, that Holland-America Line 'came into possession and control of the said assets of Red Star Line with full knowledge of plaintiff's imprisonment,' and 'knew or should have known that the plaintiff had been compelled by duress and unlawful threats of severe bodily harm, indefinite imprisonment and death, as well as business ruin, into executing the said documents * * * .'
These allegations are repeated in all five causes of action set forth in the complaint. And, plaintiff demands judgment 'for the possession of said assets of Red Star Line or for the sum of $ 3,300,000.00, the value thereof in case possession thereof can not be given to plaintiff, on the First, Second and Third causes of action. * * * '
In the first cause of action, plaintiff claims unlawful conversion of said assets of Red Star Line by Holland-America Line; in the second, plaintiff sues for the wrongful detention of said property; in the third, plaintiff claims failure to return property on demand; in the fourth, plaintiff sues for $ 2,500,000 for the loss of the use of said assets while unlawfully detained; and in the fifth cause of action, plaintiff sues for the proceeds of two ships -- the insurance on the S.S. Pennland, which was sunk in April, 1941, and the sale of the S.S. Westernland, which it is alleged Holland-America Line sold in January, 1943. Plaintiff also demands earnings, profits and benefits received by the latter from the use of said assets. In this last cause of action the amount claimed is $ 3,660,000.
Here, it should be noted that within a few days after this action was begun, plaintiff instituted suit in the Supreme Court of the State of New York, New York County against Van Heyghen Freres, S.A., a Belgian corporation, for damages arising from the alleged unlawful taking of another vessel belonging to a certain German limited liability company of which he alleged he was sole owner of all the shares. The action was removed to this court and upon motion, subsequently made by defendant in that case, the complaint was dismissed. On appeal to the Circuit Court of Appeals that decision was affirmed. Bernstein v. Van Heyghen Freres, S.A., 2 Cir., 163 F.2d 246. A petition filed with the United States Supreme Court for certiorari was denied. 332 U.S. 772, 68 S. Ct. 88.
Defendant submits as part of its moving papers, a copy of the complaint in that action which was brought by plaintiff as sole owner of the entire capital shares of Arnold Bernstein Schiffahrtgesellschaft m.b.H., a German limited liability company, against Van Heyghen Freres Societe Anonyme, defendant. The allegations in the Van Heyghen complaint are substantially the same as those contained in the complaint herein. Many of the material allegations are identical.
Paragraphs 2 and 3 of the instant complaint are precisely the same as paragraphs 2 and 3 of the Van Heyghen complaint, save for the names of the German companies involved. The allegations of alleged duress exercised on plaintiff in paragraphs 8, 9 and 10 are the same as the allegations in paragraphs 4, 5 and 6 of the Van Heyghen complaint. In the latter the acts of duress are ascribed to 'Nazi officials in Germany,' while in complaint herein they are ascribed to 'Nazi officials of Germany.' Paragraph 7 of the Van Heyghen complaint is the same as paragraph 11 of this complaint except for a few inconsequential changes in the wording. All the allegations of paragraph 12 in the complaint herein are contained in paragraph 8 of the Van Heyghen complaint, the only difference being that in the latter plaintiff's Jewish faith and the policy of eliminating so-called non-Aryans from the German Reich is alleged. Paragraph 9 of this latter complaint is the same as paragraph 13 of the instant complaint.
In both the first cause of action is for conversion. In the Van Heyghen complaint the second cause of action embodies the essential allegations of the second, third and fourth causes of action of the Holland-American Line Complaint. The third and fourth causes of action of the Van Heyghen complaint are essentially the same as the fifth cause of action of the complaint herein. In the former the plaintiff demands judgment for damages merely, but here plaintiff demands judgment for possession of his property as well as damages.
It was said by the Circuit Court of Appeals in Bernstein v. Van Heyghen Freres, S.A., supra, at page 248 of 163 F.2d:
' * * * 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.'
And the court further said at, page 249 of 163 F.2d:
'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. We have held that this was a necessary corollary of decisions of the Supreme Court, and if we have been mistaken, the Supreme Court must correct it.'
It is obvious therefore that when these principles of law so enunciated are applied to the complaint herein, it must be found that the district court has no power to proceed on the facts alleged, and the complaint must, as it now stands, be dismissed.
At this point, we have to consider the cross-motion of plaintiff for leave to serve a 'second amended complaint,' which, with this motion, he now submits. This proposed second amended complaint (hereafter referred to as the amended complaint) contains only four counts. Plaintiff does not seek judgment 'for the possession of said assets of Red Star Line' or in the alternative a money judgment, as in the complaint, but merely a money judgment. In both complaints, however, he seeks judgment upon the ground that because of the coercion practiced upon him, certain documents executed by him relating to the matters in controversy are null and void; but, while in the complaint he alleged that the acts of coercion were the acts of 'Nazi officials of Germany,' while he was 'imprisoned in a jail in Hamburg, Germany,' here, while pleading that he was 'under duress and coercion' there is no allegation of imprisonment by Nazi officials or by anyone else. When compared with the complaint, the amended complaint neither amplifies nor corrects any of the allegations concerning the acts of 'duress and coercion'; the details alleged in the former are now simply omitted.
The complaint alleged that 'in January 1937 the plaintiff was taken forcibly into custody by Nazi officials of Germany and imprisoned in a jail in Hamburg, Germany,' and 'that said Nazi officials had designs on his life as well as liberty and business interests' and that he 'was compelled by said Nazi officials, by duress and unlawful threats of severe bodily harm, indefinite imprisonment and death, as well as business ruin,' to execute the transfers involved. The amended complaint contains none of these details, nor does it set forth the circumstances or the source of the threats. It only alleges that, 'Prior to November 1938 plaintiff, being then in Germany, was told and led to believe that unless he executed documents appointing one Marius Boeger to direct the management and affairs of said Red Star Line and transferring to said Marius Boeger control of plaintiff's interest in and shares of said Red Star Line, plaintiff and members of his family then in Germany would be in grave peril of life, limb and liberty, and plaintiff would be ruined financially.'
We do not stop here to pass upon the legal sufficiency of these very general allegations of coercion and duress. Indeed, it appears that they are entirely insufficient, cf. Chamberlain Machine Works v. United States 270 U.S. 347, 349, 46 S. Ct. 225, 70 L. Ed. 619; Kamenitsky v. Corcoran, 177 App.Div. 605, 164 N.Y.S. 297; possibly, this might be cured by plaintiff, if permission were to be granted for the service of an amended complaint. In one of their briefs, plaintiff's attorneys say of this proposed amended complaint:
'The proposed amendment of the complaint has for its purpose the elimination of language which may be subject to misinterpretation and misconstruction, and the inclusion of facts (such as amount of damages sustained, legal status of Red Star Line, etc.) some of which were ascertained upon the continued examination before trial of the defendant, or otherwise subsequent to the service of the amended complaint. These additional facts are complementary and germane to the allegations in the present amended complaint and could have been included therein had they then been known. The defendant will not be prejudiced if the additional allegations are included now. See Moore v. Petty, (8 Civ., 1905), 135 F. 668, 669, 675; Michelsen v. Penney (2 Civ., 1943), 135 F.2d 409, 416, 417; Downey v. Palmer, (2 Civ., 1940), 114 F.2d 116, 117; * * * .'
And they say further that: 'The proposed amended complaint is not based upon acts of officials of the German government acting as such performed within German territory. The elimination of references to Nazis and Nazi officials is a complete answer to defendant's contention that the acts of which the plaintiff complains are not subject in this country to review or challenge as to their validity. The Circuit Court of appeals' decision in the Van Heyghen case stated (163 F.2d at page 249) that even if German law in 1937 authorized private extortion of Jewish owned property, no court of New York would recognize title obtained through such extortion, and accordingly the victim thereof would be permitted to reclaim his property. See also Stern v. Frisch, Sup. 1946, 66 N.Y.S.2d 497.'
It is quite apparent that plaintiff by his amended complaint seeks to overcome the difficulties presented to him by the application of the decision in the Van Heyghen case, supra, to the complaint.
Rule 15(a) of the Federal Rules of Civil Procedure provides that, under the conditions here presented, plaintiff 'may amend his pleading only by leave of court' 'leave shall be freely given when justice so requires.' This application for permission to serve a second amended complaint comes after leave has already been granted to serve a first amended complaint (by Judge Francis G. Caffey, U.S.D.J., on July 23, 1946). More than eight years have elapsed since the events complained of occurred and two and a half years since suit was brought. Yet, plaintiff's request does not impress us as being a manoeuvre to prolong futile litigation; but rather as an effort by a litigant, who allegedly has suffered grievous wrong and damage, to secure his day in court that he may have an opportunity to present the evidence he has to support his claims.
Plaintiff, in explaining the changes now made in the proposed amended complaint, relates in the affidavit supporting his application.
'It is true that I had been arrested by persons who I assumed and still believe were members of the Nazi party. I am of the Jewish faith and then I knew what now is a matter of common knowledge, namely, what was then happening in Germany to persons of my faith. Advisers, whom I trusted, including my own then attorneys, told me that they had talked with Nazi officials, and were convinced by all the circumstances of the situation that unless I surrendered my shipping interests my own life and liberty and also the liberty and lives of the members of my family would be gravely imperiled. I believed my advisers, and solely by reason of that belief and in fear of the threatened consequences, I signed the documents purporting to transfer my properties.'
'The duress under which I acted was the consequence of my knowledge of what was happening in Germany and what had happened to me, and of the statements made to me by my advisers, who were private persons and neither governmental officials nor purporting to act as such. Boeger was never represented to me to be a governmental agent, but merely as an acceptable 'trustee' to supervise the affairs of my lines in my stead.'
'Furthermore, I never intended to and did not allege that the extortion of my property was a governmental confiscation or nationalization. It never entered my mind that by the use of the word 'Nazi' or the phrase 'Nazi officials,' which I used in the colloquial sense to describe individuals. I could be thought by any one to be characterizing as governmental confiscation the extortion of my property. There never was a decree, order or governmental or judicial action appropriating the properties I signed over. Information which I have received recently confirms that the Red Star Line continued uninterruptedly after my arrest, and until its liquidation, as a private enterprise, and that the German government never assumed control over its affairs nor took or received any property, moneys or benefits from it.
'Promptly after the cessation of hostilities in Europe I commenced efforts to secure from Germany confirmation of details concerning the transactions of which I was the victim. Because of post-war difficulties of communication, these efforts were not immediately fruitful. I learned authoritatively, for the first time, that the Red Star Line had been dissolved as of June 22, 1939, when I received a letter from my former German attorney, Dr. Carl Stumme, dated April 1, 1947 and mailed from Hamburg, Germany. Thereafter, in a letter dated July 24, 1947, also mailed from Hamburg, Germany, he sent me certified copies of extracts from the files of the Commercial Registry in Hamburg showing such dissolution. On August 28, 1947, after the expiration of my time to move in the Van Heyghen case for a rehearing in the Circuit Court of Appeals, and a few days after the filing of my petition for certiorari in that case in the Supreme Court, I received a letter from him stating that he had succeeded in communicating with Marius Boeger, and was in receipt of a letter from Mr. Boeger stating that the latter had concerned himself with the Red Star Line only in the capacity of a private individual; that he was never at any time in any way an agent of the German government or of any of its officials; and that the Red Star Line was never a German governmental undertaking nor operated as such during his connection with it.'
Plaintiff now submits to the court, for the first time, an affidavit of Marius Boeger, sworn to on December 20, 1947, and authenticated by the American Vice-Consul at Hamburg, on January 14, 1947, in which Boeger recites:
'2. I have never been a German governmental official or agent and in particular at no time served as such during ...