Brief on Behalf Amicus Curiae — United States v. Pink

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“Iy THE, DES 15 “i941.

Supreme ‘Court of, the. United State

iz

CHARLES Aweti cect | |

OcrosER TERM, 141 CLERK x |

1

No. 42 $x a I arr

UN ITED STATES OF AMERICA,

‘ Petitioner,

Vv."

' + LOUIS H. PINK, Superintendent of Insurance of the

‘State of New York, and as Liquidator of the Domesti-

. cated United States Branch of Rirst Russian Insurance

Company Established in 1827 ; V ICT OR.YERMA-

LOFF, and others. :

4

On aA Writ or CERTIORARI .TO THE SUPREME CourT . ©

OF THE STATE‘OF NEw YorK, NEw YorK COUNTY. .

’

3

.

. . . =a

AMICUS CURIAE “BRIEF ON BEHALF OF CERTAIN

RECEIVERS UNDER ON 977-b OF THE NEW YORK

CIVIL PRACTICE ACT

J FrepEerRIcK H. Woop,

’ Acpert Ray CoNnNELLY,

Qf Counsel.

1. The New “York. court has held that the Soviet

decrees did not purport to confiscate assets in

New York and do not affect the disposition of

-such assets. Fr SG ga CA et one

2. No federal question is presented by: the deci-

sion of the New York Sr Per yr a

SK

N

: INDEX

: PAGE

~ Consent of Parties... Sea re hey Re Nera Me epee

~Spinions Below. pata Nera <a ae ee rere a &

. Jurisdiction "2 FEO eee ae a me

Summary of Argument. wat te tee ee soe ies

_Argument—- ak - cea ,

The decision. of the New York C ourt of Appeals

does not present’a federal question subject to «sane

view by this. C ourt. ie Say es eas tle vo o 3%

Po

ii

TABLE OF AUTHORITIES CITED. /

ry yA .

. Cases — . ‘

; a | PAGE

Aetna Life | Ins, Co. v. Dunken, 266 U. S. 389, 394... ° 15: f

Aetna Life Ins. Co. v. Tre mblay, 223 U.S - 185, 190. 16

—. eo

>» Bachtel v. Wilson, 204 U.S. 36. Oh enue nan’ eecere eee";

Barth v. Backus; 140.N. Y: 290/.°. «oo see ioe ves es 10

. Bradford Elec. Co. v. Clapper, 286 U. S. 145, 154... .16, 17.

Erig Railroad Co. v. Tompkins, 304 U. S. 64... 0006. 4

. Fox Filni Corp. v. Muller, 296 U. §.207.. LATE ee |

Grayson v. Harris, 267 U.S. 352, 357, 358....... Sh

Griffin v. AlcCoach, 313 U.S. 498, 506,,607........ 11, 16

Guaranty, Trust Coe. vy. U nited States, 304. U. S. 126, oe

MAD ck. Lessev ed. fe eegtu ones re Soaeed 4513, 56

é a She ‘

, Henly v. Donoghwe 116 US. L 4 3 pee ae-adaens uae

_ Johnson v. Risk; 137 U. S. 300 eee ett oueds foo, YY.

Klaxon Co. v. Stentor Co., 313 U. 8. 487, 498. 2.0... 16

_ Kryger.v. Wilson, 242 U.S Sg ee gy arora De Se SAG

Lytey. New York, 293 U. S. 52,-54, Be ».s47, 18

Moscow Fire Ins. Co. v. Bank of New York, 280N. sf

286, aff'd without opinion, 309 U.S 5. 624, pear

den. 309 U, SOM. veo ses: Pe eea _ «3-8, 11, 13, 14 -

Natit. Carpenter ,*305 es S297, fr 14

Oliner-v. py rele an Oriental Banking Corporation; 252 oe

App. Div. 212, aff'd without opinion, 277 ‘N. Y. 5 iI

oe eA

Hib “

‘Judicial Code, Section 237(b), as amended by Act °

Feb, 13, 1935 [28 U. wu C, § 344(b) Pec rse ese sOe bey 13°

_New York C ivi, Practice Act, Section 977 TS. 2. tay ae

‘ Seat ot eae

Pacific E-mplovers ‘Instiranée Co. Vv. Industrial . dec eke ‘

| Conmn’n 5306 U.S. 493, S00. oe decease. ne oft 16.

acre ehh Mound. City Asséc tation, 124 U.. S. 603. ase

f Ieited States y. Belmont, 301 *); s. 7, Re Pee 10, 13,16

_ United States v. Manhattan Co., 276 N. ¥: 36 aor ae

Western Indemnity Co. ¥- Rupp, 235 U. S. 261, 275. 15

i

7

"Statutes ie Age

\

SBP Stene eth cise eatin orl

IN THE

“ Supeeme Court nf, the Zao States:

OctoreR TERM, 1941

UNITED STATES OF AMERICA,

Petitioner,

Vv.

Louis H. Pixk, Superintendent of Insur-~) No, 42

-ance of the State of New York, and ° as

- Liquidator of. the Domesticated United

States Branch of First, Russian Insurance :

Company Established in 1827; ° Victor hs

YERMALOFF, and others. : |

ine BRIEF ON BEHALF OF

]

, iRWIN STEINGUT. and HAROLD E. BLODGETT, as Receivers of | the:

assets, in New York of Russo-Asiatic Bank;

JOHN R. CREWS, as Receiver of the assets in New Sica of. Petrograd

‘ Metal Works;

- ELMER F. QUINN, as Récstear of the assets in New York of Viadikav-

kazsky Railway Companys

JOHN H. THOMPSON, as Receiver of the assets in New York of Petro-

grad Trading Bank;

THOMAS 1. SHERIDAN ve JULIUS SCHOR, as Receivers of the as#ets

in New York of Volga Kama Commercial Bank; and

HARRY BIJUR, as Receiver of the assets in New York of Northern Insur-

ance > Company of Moscow,

‘

‘CONSENT OF PARTIES -

' This biiefiis stibmitted upén the written con€nt of. the

parties to this appeal, filed with the Clerkof this Court.

The Receivers in whose behalf the brief is filed have. been

appointed by court orders purstiant to Section 977- b of the.

Gvil Practice Act of New York and are parties to pending

actions which involve the questions discussed herein,

As Amici Cariae. :

HY

‘

x

the State of New York, New York County, ts not- reported,

OPINIONS BELOW

Phe memerandum. opinion of.the Supreme Court ot

The judgment, based thereon, was unanimously. affirmed

with OURO] pinion by the Appellate Division of the Supremé

ey ‘Court for the’ First Judicial Department. ( (259 App. Diy.

SFL The per curiam opinion of the New York Court 4

Appeals, affirming the judgment bel: ow, is reported in 284

twee >

N. ¥.. 9

Petitioner, invokes the jurisdiction of this Court. under.

Section 237(b) of the Judicial vont as: amended by ‘the

Act of February 13, 1935 [28 U. S.C. - $344(b)].

; SUMMARY OF ARGUMENT

*

The decbien a the New York Court of peer does not

present 4 a federal question subject to review by this Court. -

\ e

1. The New York court has ‘held that the Soviet decrees

relied upon ‘by petitioner did not purport fo confiscate as- ’

séts’ in: New York of the U nited States bratich of a‘Rus-.

‘sian insurance company and donot affect the disposition of

such assets. : ey Bi

» ‘ . ’ | .

2. Neither: the interpretations of foreign’ law by .the

New York court nor its decision as to. the application &

such: foreign law raises a federal: question,

JURISDICTIONS. — ,

aaa

a ae

ene aw RO See

tb BLAIS, aA EEE te

ee A tare

ARGUMENT

- THE DECISION OF THE NEW YORK COURT OF

APPEALS DOES NOT PRESENT A FEDERAL QUESTION

‘ SUBJECT TO REVIEW. BY THIS COURT.

aL The New. York court has held that the Soviet

decrees didnot purport to. cortficcate ‘assets in New York

and de not affect the disposition of such ‘assets. —

.

The courts of the State of New Y ork have held that

the Soviet dectees relied | upon by petitioner did not purport

to confiscate assets in New York: of the’ United States

branch of a Russian, insurance company and do not affect

‘the dispositipn. of syich assets. The courts bélow have so

held in this case and: in so doing, hav e followed the decision

in Moscow Fire Ins. Co. \ ', Bank “ New York, 280 N. .'s

. 286, aff be without opinion, 309 U. S. 624, rehearing denied,

309.U. S...697. |

Polteg ie curiani opinion of the Court of. Appeals in

this case expressly states that the court applied the same

rules: of law which ‘were. applied in its decision in the

_Moscotv case. The facts considered in the Mescow case

are substanti: uly thé same. as the facts herein. bi In the

Moscow case, the United States Government, intervener,

appes led to. the Court of Appeals from a judgment, Tei

dered after, a trial of the issues, dismissing on.the merits

its petition asserting title to surplus funds in New York of

_the ‘Moscow: Fire Insurance Gompany. ‘The claim of the

“United Sti ites, as the assignee of the Soviet government

under the Litvinoy assignment, was based upon the ities

~ decrees nation: izing Russian insurance _ companies and ¢

confiscating their assets.

-

The Court of Appeals held in the Moscow case (1) as.

a matter of construction, thatthe Soviet confiscatory de-

crees did not purport to apply to assets in New York of

‘the United States branch of.a Russian insurance corpora-

tion; (2) as a matter: ‘of conflict of laws, that. rights to .

property in New York belonging to the United States.

branch of a Russian insurance corporation are dependent,

not pon the law of Russia, but upon the law of New York;

and (3) that under the law of New York, upon the termina-

‘tion in Russia of the corporate existence of the Russian

__ iwsurance corporation, its residual rights to property located

in New York passed to its stockholders and-creditors and

not to the Soviet government. y >

‘In arriving at that decision, the C ourt of Appeals (per

Lehman, J.) thus analy zed the problems involved (pp. 302-

303 j

“The rights” of the United States. are bite

solely from the assignment by the Soviet government

of. its claims against nationals of the United States.

The claims of the Soviet government for the moneys

ar property.in this country, of Moscow Fire Insur-

ance- Company are based solely on its decrees of:

natiorialization of insurance companies and of seiz-

. ure of their assets. The United States asserts here

'stitle’ to property of a branch in‘ this State of a’

- Russian insurance corporation which it is said was.

iransferred, by force of these decrees, from the

, insurance corporation to the russian government.

. Two questions arise: first, w hether the Rissian de-

- crees were intended to have such effect, and, second,

w ether. even if so intended the courts of this State

will‘give them their intended” ‘€ffect:

-. * ~ fa *. " om *

“The question then of thie construction of the’ Soviet

' decrees is a question of .the law of Russia to be

DEE DEE IMTS EL -

.

determinedetike other questions of foreign law, upon

the testimony of expert witnesses, decisions, of the

foreign courts or officers authorized to. promulgate

or authoritatively conStrue the foreign law, and upon

the relevant documents. “The question of the effect

to be given to the foreign law within this State by

the-courts of this State must be determined in ac-

cordance w ith the law of this Staiz, * * *” >.

W ith respect to the construction of. the Soviet decrees;

the court reviewed the findings of the reicree that ‘‘the

decrees were not intended to apply to the property in this

State of the United States branch of Méscow Fi ire

Insurance.Company” and held that, notwithstanding the

testimony of an expert witness to the contrary, “‘the.find-.

ings. of the referee ate fully sustained: by the ev idence”

(p. 306). - ee

The court then considered whether, even if the Sovi let.

* decrees were intended to apply to property with situs- in

New York, the courts of New York should .give such

decrees their in «nded effect and concluded that rights to

property ine New York belonging to ‘the United ‘States

branch of a Russian insurance comipany are dependent,

hot upon the law of Russia as formulated in the Soviet

detrees, but upon the law of New’ York. On this point

the court said (pp, 307-310) : a .

“© ertainly no decrée monopolicing the business of,

* - insurance in Russia; taking over the conduct of the

3 insyfance business formerly conducted in Russia by

irisurance corporations, and términating the obliga-

tions of such companies could possibly have been

intended to apply to business ronductéd here, or: if

so intended, could be binding re. sche Ai °-

or ea eee a oe

ote ae

“The findings or conclusions of the courts below

that the decrees of nationalization of insurance were

not intended to have effect heré and that title to and

right to possession of the capital of the United States

branch of the insurance company is dependent upon

the law-of this State, rest upon a firm foundation.”

The court then examined the law of New York to deter-

mire who, under that law, was entitled to share 1 in the dis-

tribution of the assets of the United Statés branch of the

Moscow Fire Insurance Company and concluded that,

“the situation’ here presented, the residual rights of i

jiationalized Russian corporation. passed to its stockholders

and creditors, = not to the Soviet gov ernment. The court

Said ( p. 314):

“The courts, giving effect as they must to the ex-

tinction of the: parent conipany, must determine

whether the parent company’s residual ‘right to

- property here passes by confiscatory decree to the

sovereign who extinguished the parent -corporation

or whether under the law of this State such rights

have passed to the stockholders and foreign credi-

tors who, in answer to an: invitation: extended: to

them by this State, have come in and proven their

claims in accordance with a procedure dev ised by

this court to ‘conform to justice and equity’ as those

terms are understood here, The courts below have’

made the proper choice, not because. enforcement

of confiscatory decrees of property situated else-

where is contrary to our public policy, but because

under the law: of this State such confiscatory decrees .

do not affect the property claimed here.”

The decision in the instant casé rests upon the identical

-- grounds on Ww hich the decision’ in the Moscow case was

based. In this case; precisely the same questions were pre-

sented.

:

Paragraph 8 of the complaint alleges that the Soviet .

decrees nationalized the assets “if every kind.and whereso-

" ever situated of all Russian insurance companies” (R. 23). °

The answer denied each and every allegation of paragraph

8 of the complaint, except: the issuance of the decrees eR.

383. In addition, the- separate defense was pleaded that the

confiscation Was. operative only within Russia, and that

‘the Soviet government itself has recognized that the nation-

" alization and confiscatory (lecrees were. intended only to

confiscate’ property within. the territorial limits of Russia

and not to extend to. property outside of such territorial

limits (R. 46-47). - Paragraph 10 of the complaint alleges

that, as a result of” the Soviet decrees, the assets in New

York of the insurance conipany become the property of the .

Soviet government (R. 24). The answer denied such

allegations \(R. 37).

In. the affidavit subnritted by respondent in x support. of

summary judgment dismissing the coniplaint,

it is stated that ‘“‘the facts in the Moscow arid the instant

cases are parallel” and that the “Soviet decrees involved are’

also the samé (R. 15). Such statements were not con-

troverted in petitioner's opposing -affidavit, which asserted

merely that in wiew Of the then pending < ipplication to this.

Court for certidrari to review the Aecision of the New

begs Court’ of peal in the Moscow ¢ case, the dismissal

f the complaint \in’ the. instant case was premature (R.

50-51), ite ~ 25

“The Court at

summary judgment

tase (R. 52}, and in‘affirming the judgment. below, the

Court of i ea relied: exclusively upon the Moscow de-

cision Sos 71).

pecial Term granted the ‘motion for

solely on the authority of the Moscow.

ees

: =

As was pointed out in the-M oscow decision, the Soviet

government has itself recognized in various promulgations

_that the confis¢atory decrees here in question purported to

ciifiscate only’ the property physically located within the

*-..teFritorial limits of Russia, and did ‘not purport to con: .

fiseate property located outside of such territorial litnits.

In its answey filed-in’ this case, respondent has specifically _

cited severgl of such promulgations, including Decision -

No. 124 of October 16, 1924, by the Third Department of

the Pedple’s Commissariat: of, Justice, interpreting the de-

cree of ‘Xovember 18, 1919, on the. annulment of life i insur-

anee. contracts. It was held in. that Decision that “the

genera} annulment of agreements of life: insurance does

not extend to the territories located without -the borders

“of tlie U.'S. & Bh. ae farticularly to the United States

. of orth Assatica” (R. 47 Dae ape

‘The other promulgations ot the Soviet ‘yoverriment spec: ifi-

calfy mentioned. in the respotident’s anSwer herein are Circular

"42; dated April 12, 1922, of the- People’s Commissariat for

eign Affairs; Circular No. 194, dated’ September! 26.. 1923, of

People’s Commissariat of Justice; ‘and Circular’ No. 32 9, dated

Oktober 23, 1925, of the. People’s Commissariat for Foreign

=. i he (R. 47).

‘ Circular No. 42 states that :

“The Law on Property es stablished by the decrees of the

Russian Soviet Government, does, therefore, determine

olly iégal- relations pert aining to property rights as arise ’

on the tervitury of .the R. S. F..S. R. — Legal. relations

pertaining to property rights, wheréof the By matter

is situated outside the. territory of the R..S. F. S. R. and °

is not connected with such. territ ry cannot be governed

outsidé the. territory of the R. S. FLS. R. by Russian Law:

and are——irrespective’ of the nationality of the persons

entitled to such tights, bé they® even, “Russian citizens—

‘subject to” the effects of Local Law.’ +

‘Circular No. fo4 states that:

*__ “Proprietary rights of citizens of the R".S. F. S. R. én-

forceable outside the R. S.. F. S. R.-are aati by the

laws of the country where they are to’ be enforced.”.

.

~ : , « '

9

There is no decision of this Court or of the New York

courts holding, after a trial of the issue, that the Soviet

‘decrees did’ purport to confiscate such property located

in New York. In United States vi Belmont, 301 U.S. 324, |

the. question before the Court was whethey or not. the

District Court had erred.in grantlng a mofion to dismiss

the complaint for failure to state a‘squse/”. action. .For

the purposes-of that decision on the pleadings, it was ad-

titted that, as alleged in the complaint (301 U. S.-at p.

_ $26), the Soviet decrees had nationalized the assets, where-

_ever located, of Russian nationals, including the ‘relevant

bank deposit. — _ Pi TS -

' Similarly, in United States v. Manhattan Co., 276 N. Y.

396, the complaint also alleged (276 N. Y. at p. 399) that

the: Soviet ‘decrees had nationalized the assets; wherever

located, of Russian nationals, including the assets in New

York there in question, and on a moticn’to dismiss the

complaint for insufficiency the Court of Appeals said that

(p. 399) “every fact set forth in the complaint ‘must be

deemed to be true”. Thus, in neither the Belmont case

nor thé Manhattan case was there a finding based upon

evidence that Soviet decrees did purport to confiscate assets

in New York of Russian nationals.

With respect to thé holding herein that, in any event,

rights to property in New, York belonging to the United

States branch of a Russian‘insurance corporation are de-

pendent, not-upon_ the law of Russia, but upon the law of

New York, it has long. been settled that such rights are

necessarily to be determined with reference ‘to the laws

' of the state in which the property is located, and that rights

in such property predicated upon foreign law will not be

recognized or enforced where the effect of enforcement

. 7 t

Y a

10

would be to exclude creditors or would be otherwise con-

, trary to the public policy of the state.

As was pointed out by Mr. Justice (now Chief Justice)

Stone in his coneurring opinion ih United States v. Bel-

mont,*301 U. S. 324, 334, 335, this Court has often recog-.

nized that a state may refus€to give effect to a transfer,

_made elsewhere, of property which is within its own terri-

torial limits, if the transfer is in conflict with its public

policy, or where the subject of the transfer is a Cliose in

action dtie from a- debtor within the state to a foreign

creditor, and, dinanigeesd, that:

“* * * it is a recognized rule that a state may rightly

‘refuse to give effect to external transfers of prop- |

= erty within its borders so far as they would operate

to exclude creditors suing in its courts. Harrison.

- v. Sterry, supra [5 Cranch. 289]; Security Trust

Co y. Dodd, Mead & Co., supra [173 U. S. 624];

Disconto Gesellschaft v. Umbreit, supra [208 U. S.

570]; Clark v. Williard, supra [294 U. S.-211];

- Barth v. “Backus, supra See N.Y. 2h” °

. Barth v: Backus, 146 N.Y. 230, one iv the cases ee §

in the foregoing quotation, stated the policy of the State

of New York on this point at an early date. It, was hek

in that case that title to property in New York which was

acquired by an involuntary assigninent under the laws‘of -

another state would not he récognized by the New York

courts when asserted against thetights of creditors pursu-—

ing a remedy against the property in New York, even ©

such creditors are not residents of New York but are resi-

dents of the state wherein the inv oluntary assignment was

made.

\ a

Also, in. the recent case of Griffin v.. McCoach, 313

U. S. 498, 506, 507, this Court (per Mr. Justice Reed)

has said, in discussing a situation involying the full faith

and credit clause:

“Rights acquifed by contract outside a state are

enforced within a state, certainly where its own

_ citizens are concerned; but that principle excepts

claimed rights so contrary to the law of the forum

“as to subvert the forum's view of public policy. Cf.

Loucks v. Standard Oil Co., 224 N. Y.. 99, 110;-

120 N. E. 198.. It is ‘rudimentary’ that a state ‘will.

not lend the aid of its courts to enforce a contract:

‘founded upon a foreign law where to do so would

_ be repugnant to good morals, would lead to disturb-

ance and disorganization of the local municipal law,-

or in.other words, violate the public policy of. the

State where the enforcement of the foreign contract -

.is sought.’ Bond v. Hume, 243 U.S. 15, 21. * * *

ee ae * * * * oe

a

Bin lie: ie is for. the state to say y walectioer a contract

| contrary to such a statute or-rule of law is so offen-

. Sive to its view of public welfare as to mance its

courts to close their doors to its enforcement.”

_ The conclusion of the court in the instant .case that

under New York law no rights-in the’ New York assets .

- passed to the Soviet government.by virtue of the confis-—

catory decrees is supported not only by the eonsideration

‘mentioned in the Afescow case. but alsoaby legislative ex--

Pression of the pglicy of the State of New York. By Section - .

: 97- bof the Civil Practice Act*, the New York Legislature

" *Section 977- b was construed and held to be constitutional in,

Oliner vy. American-Oriental Banking C or poration, 252 App. Div.

~~ aff'd without opinion, .277 N. Y. §90, ;

oe 6°

ha See Oe

‘

has set up a. compechensive scheme f for the liquidation of

assets in ‘New York of corporations which have been

nationalized in their domiciliary country: Or, ‘countries.

Provision is made in Section 977-b ‘for the appointment of

/. receiver of such assets, for the investigation of claims,’

for the payment .of creditors, and for the disposal of the

stirplus t8 stockholdersyor others who may: be entitled.

thereto. Subdivision 19 of. Section 977-b provides, inter

alia, that © af :

_ “8 * * such * * * nationalization, * * * in the country

_. of its domicile, or any corfiscatory law. or decree

thereof, shall not be deemed to have any extra-

’ territorial effect or validity as to the property * * *.

of such corporation wichin. the state * * *,”

It is ‘therefore submitted: that the decision of the in-

stant case is clearly correct and, if jurisdiction of the cause .

should be assumed by this Court, the judgment of the state ~

court. should be affirmed. It. is also submitted, however,

thatthe decision of the New York court does not present .

a ¥ederal question sabject to review by this Court.

-

; 2. ‘No federal question is s presented | y the destin of

the New York court.

Me Pec

ie Petitioner inv ‘okes’ the jurisdictio of this Court under

Section 237(b) of the Judicial ode,°as amended (28

U. > C. § 344(b)], which provides that: =

“Tt shall be competent for. the Supreme Court,

by certiorari, to requjfe that there be certified to it

for review. and determination, **—* any, cause

wherein a final iaquaiek or decree has been ren-

dered or r passed by the a court of a state’ in

13

which a decision could be had Where is drawn in

-- question the validity of*a‘treaty or statute of the

‘United States; er where is drawn in question the ,

validity of a statuté of any State on the ground of

its being repugnant to the C onstitution, ’ treaties, or,

_ laws of the United States; or where any title, right,

+ privilege, or mamunity is specially sef up or claimed

by either party under the C onstitution, Or any treaty

or statute of, or commission held or authority exer-

cised urider, the United States; *.*.*."

It is indisputed that in this case no question has been

raised concerning the validity of any statute of the vv nited

States or of the State of New York. And. we are not

concerned with the question whether the Litvinoy ‘assign- _

ment is a treaty within the meanihg of Section 237(b) of

the Judicial Code, betause under the Litvi inov assignment

the Soviet gov ernment assigned to the United States gov-.

- ernment only ‘“* * * the amounts admitted to be due or that

- may be found to be due it, as the successor of prior -Govern-

‘ments of Russia,-or otherwise, from ‘American niitionals,

+**” (R. 36a,'36c). By the terms of that assignment,

the United States government . reteived only the amounts

admittedly due, or thereafter found to be due, the Soviet

government, and this Court has held that by virtue of: that

“assignment the United States government received only -

‘the rights possessed. by the Soviet government at the ~—

of the assignment United States, v. Be Imont, 301 U.

_ 324, 335-37; Guaranty: Trust Co. v. United States, Ae

U. S,.12R 141.

As the New York-Court of Roneale stated in the

Mostow case (280 N. Y. 286, 304):,

“ *There is nothing * *.* to suggest that the United

States was to acquire or exert any greater, rights

°

14 S: %

that) its transferor or that the President by mee

exectttive actign purported or intended to alter or

ditninish the rights of the debtor with respect. to

-any assigned claitas; or that the United States * * +

_ isto do more ¢hay the Soviet government could

have done aiter Yiplimatic recognition—tnat. is, col-

lect the clairns in conformity to local law. Even the

. language of a treaty wherever reasonably : possible

will be construed so-.as nit to‘override state laws —

or to impair rights arising tnder: them.’ (Guaranty »

Trust Cé. v. United States, 304 U. S. 126, 143.)-

' The United States has not. evoked: the judicial.

‘authority of the States in aid_of an agreemtnt it

has consummated, calculated to gike the. decrees ot

the Soviet government force beyond ‘the force giv en.

jto decrees of “other recognized governments. It in- -

“vokes the aid of the court only,.to enforce rights of.

* the Soviet government, whatever they ‘might be,-

which the United States has acquired by assignment,

to property within this State and subject to ‘the law

of the State.” - * :

In determining the ‘claims of’ ‘the Soviet goverment

which are ‘here asserted by the United States, the New:

York court has decided (a) that such claims were de-

pendent upon ‘New York law and (b)- that. unider New”

York law, such claims were invalid. .

On the latter point it is, of course, not open to questish 3

- that no federal question is presented, for the decision of the

highest court of a state is cenclusive as to the law of that’

state. Frie Railroad Co. v. Tompkins, 304 U.S. 64; Ne °b-

. lett v. Carpenter, 305 U, S. 297,.302.

‘The only possibility of a federal questioh 1 must, -there-.

fore, lie in the decisicn that the claims of the Soviet govern-

ment to property located i in New Y & were dependent upon

15

te)

> rests upon alternative grounds: .

(1) That thece was no foreign laweapplicable to

‘the claims, inasmuch as the Soviet decrees did not

purpert to affect property in New York; and

sented, rights to the property “in question must be

determined:on the basis. of New York law and not

Russian law.

cae is subacute that neither alternative’ ground of the

decisioni presents a federal question.

The decision that the Soviet confiscatory poe -crees did. not

purport to affect assets in New York of the Unitedi§tates

branch of a Russian insurance company was a determina-

tion of a question of fact, .e., the interpretation of foreign

is presented by an allegedly erroneous interpretation of

foreign law by a Laas court. Phillips v. Mound Ci side Asso-

ciation, 124 U. . 6053 W ester Indemnity Co-¥ > Rupp;

235 UU, S.. 201; -: _ Cf. Hanle y vy. Donoghue, 116 U.S.

Grayson v. Harris, 267'U. S. 352, 357, 358.

“\. Even if, however, the state. ‘court had fotind that the

Soviet decrees did purport to confiscate. assets in New Y ork

and had\rested its’ decision selely upon’the ground that un-

der the circumstances here presented rights to the property

in questin m,must be determined upen the basis of New Y ork

_ Jaw and not Russian law, its decisiori would be Merely a a

fecision as to the New Y ork rules of conflict of laws, and °

» such a decisifin does not present a federal question under

$ the due process\clause of the Fourteenth Amendment to the

e

w York law., As heretofore pointed out, that: decision’ ey

(2) That undér_ the circumstances here pre-

aw, and’ it has long been settled that no federal question —

a 4- 6; Aetna Life Ins..Co. v.. Diinken, 266'U. S. 389, 394 7

-.

a

Constitiition of, oe United States. Kryger v. Wilson, 242

“WS. 773, See Bradford Elec? Co. v. Clapper, 286.U.S

145, 154; Agiva Life Ins: Co. V. Tremblay, 223 U. S. 185,

190; Griffin 'v. McCoach, 313 VU. S498, 507; Pacifie Em-.

. ployers Insurancg Cot v. ati Accident Commi. n, 306

U.S. 493, 500; axon Co. v. Stentor Eo 313 U.S S. 487,

ea : xs

The Kryger case involvéd a ‘federal jurisdictional ques-

tion arising under the due process clause. In that case the

North Dakota. courts, had held that contract rights. which

arose in Minnesota to real property in North Dakota had

“been canceled’by proceedings under North Dakota law: This

- Court affamed the decision of the North Dakota courts and

held (per Mr. Justice Brandeis ) that doctrines of tHe cor-

flict of laws are ‘a part oc the body of the common law, and

an allegedly erroneous decision by. a state court upon a point ;

of conflict of laws does not raise a federal question ‘under

the due 4 process clause of the Constitution of the United

States. The authority of that case remains unimpaired in

, @ situation wherein it is claimed that the due process clause.

has been violated by.a conflict of laws decision of a state

court refusing to enforce rights ee oe the laws

_of a foreign government.* _

“As was said 1 in Bradford 1 E lee. Co.v. £ Tapper 286 of

145, 154:

“If the conflict presented were between the Jaws. .

of a foreign country and those of New Hampshire.

its [the Nev Hampshire] courts would be free, soe

Tt must be remembered ‘that in <énited States v. Belmont,

30k U.S. 324,’and. in Guaranty Trust Co. v. United States, 304

U.S. 126, this Court reviewed decisions of the Second Circutt |

Court of’ Appeals, and not decisi ons of the New York Court ot

Appeals... . .

7

‘far as the restrictions of fedéral law are concerned, «

to attach legal consequences t) acts done withi# the

State, without reference to t' e undertaking of the

parties, entered - into at their common residence

abroad, that such consequences should not be en-

forced between them. *-* *”

Therefore, even if it had been found that the Sov jet:

‘crees purported to confiscate for the ‘benefit of the Soviet

vernment the assets in New York of a New York branch

'a Russian insuratice company, and if the decision-be Jow

sted solely en the ground that rights arising in that man-

‘r are unenforceable under New York law, no question

ould be presented to: this. Court :for review.

It is not necessary, however, to considet in this case .

¢ problems which would be presented if the.decision bdow!

sted only on that ground. . The decision of *the court

‘low can be rested or the independent and adequate. non-

deral' ground that the ‘Soviet decrees did net purpert to

fect the assets ipequestion, and under such circumstances,

lis Court, righ gis take jurisdiction 40 review the de-:

sion of the New Y ork court. Fox F im C orp. v. Muller,

Sia a; LL ynch v. New. York, .293.U. 5.. 52;

achtel v. Wilson, 204 U. S. 36; Johnson v. Risk, 137 U. |

0. As was said in Lynch V. New York, supra; (at pp.

+-55) :.

“Tt may be surmised, from the quotatioris in its Opin-

ion, that the Appellate Division intérided to rest its

decision upon a deternfination of ‘the application of

the Fourteenth Amendment, and that the affirm-

ance by.the Court of Appeals went upon the same

ground, and not upon the non-federal ground of

the application of the Constitution and laws of the

“State. But jurisdiction cannot. be founded upon

Tete leon, atta Q

18

surmise. Nor can claim of jurisdiction be sustained

by reference to briefs and statements which are‘not

part of the record. ’

“It is essential to the jurisdiction of this Court

in reviewing a decision of a court of a State that

it must appear affirmatively from the record, not

only that a federal question was presented for dect-

sion to the highest court of the State having juris-

diction but that its decision of the federal question

“Was necessary to the determination of the cause,

and that it was actuaily decided or that the judg:

ment as rendered could not have been given without

deciding it. * * *:Where the judgment of the. state

court rests on two grounds, one ‘involving a fede?al

question and ‘the other not, or if it doeS net appear

upon ‘Which of two grounds the judgmerit was based,’

and the gr mind independent of a federal question ts

sufficient in itself to sustain. it, this C oyrt will not

take Jurisdiction.”

lt is submitted, therefore, that the decision of. the New

York court in this case does not involve a federal question

which is Subject to review by this Court.

Respectfully submitted, .

ss Daeg

FREDERICK H. WOOD,

ALBERT RAY CONNELLY,

. Of Counsel for certain

Receivers, as amici curiae.