United States v. Pink, 315 U.S. 203 (1942)

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United States v. Pink

No. 42

Argued December 15, 1941
Decided February 2, 1942
315 U.S. 203

CERTIORARI TO THE SUPREME COURT OF NEW YORK

Syllabus

1. The question of the propriety, under New York practice, of grounding a motion for summary judgment in this case on the record in Moscow Fire Ins. Co. v. Bank of New York & Trust Co., 280 N.Y. 286, is one of state law, upon which the decision of the highest court of the State is final. P. 216.

2. The Moscow case is not res judicata here, since the respondent was not a party to that suit. P. 216.

3. The affirmance here by an equally divided court of the judgment in the Moscow case, 309 U.S. 624, although conclusive and binding upon the parties to that controversy, cannot be regarded as an authoritative determination of the principles of law there involved. P. 216.

4. Judicial notice may here be taken of the record in this Court of the Moscow case. P. 216.

5. The claim of the United States in this case, based on the Litvinov Assignment -- whereby the Russian Government, incidentally to its recognition by the United States in 1933, assigned certain claims to the United States -- raises a federal question. P. 217.

6. Upon review of a judgment of a state court, this Court will determine independently all questions on which a federal right is necessarily dependent. P. 217.

7. The determination of what title the United States obtained to the New York assets of a Russian insurance company by virtue of the Litvinov Assignment and the Russian decrees of 1918 and 1919 nationalizing the insurance business, involves questions of foreign law upon which the decision of the state court is not conclusive. P. 218.

8. An official declaration by the Commissariat for Justice of the R.S.F.S.R. as to the intended effect of a decree of the Russian Government nationalizing insurance companies, tendered to the court below pursuant to § 391 of the New York Civil Practice Act, was properly before that court on appeal, though not a part of the record, and may be considered here. P. 220.

9. The Russian Government’s decree nationalizing the insurance business was intended to embrace the property of the New York branch of the Russian insurance company involved in this case. P. 221.

The Commissariat for Justice is empowered to interpret existing Russian law; its declaration as to the intended extraterritorial effect of the nationalization decree is conclusive.

10. Claims of the kind here in question were embraced in the Litvinov Assignment. P. 224.

11. The Litvinov Assignment is broad and inclusive as to the claims embraced. Its purpose to eliminate all possible sources of friction between the countries requires that it be construed liberally. P. 224.

12. Incidentally to its recognition by the United States in 1933, the Russian Government, by the Litvinov Assignment, assigned certain claims to the United States. Previously, the Russian Government had, by decree, nationalized the insurance business. A balance of the assets of a New York branch of a Russian insurance corporation, remaining after the payment of domestic creditors, was claimed by the United States, seeking to protect claims which it held, and claims of its nationals, against Russia or its nationals. A New York state court directed other distribution of the assets.

Held:

By the nationalization decree, the property in question became vested in the Russian Government; the right of the Russian Government passed to the United States under the Litvinov Assignment, and the United States is entitled to the property as against the corporation and its foreign creditors. P. 234.

13. Although aliens are entitled to the protection of the Fifth Amendment, that Amendment does not preclude giving full force and effect to the Litvinov Assignment. P. 228.

14. The Federal Government is not barred by the Fifth Amendment from securing for itself and its nationals priority over creditors who are nationals of foreign countries and whose claims arose abroad. P. 228.

The fact that New York has marshaled the claims of the foreign creditors here involved and authorized their payment does not except them from the application of this principle.

15. The powers of the President in the conduct of foreign relations included the power, without consent of the Senate, to determine the public policy of the United States with respect to the Russian nationalization decrees. P. 229.

16. The power of the President in respect to the recognition of a foreign government, includes the power to remove such obstacles to full recognition as the settlement of claims of our nationals. P. 229.

Recognition of the Russian Government and the Litvinov Assignment were interdependent.

17. The decision of the Executive with respect to the recognition of the Russian Government and acceptance of the Litvinov Assignment are conclusive on the courts. P. 230.

18. State law must yield when it is inconsistent with or impairs the policy or provisions of a treaty or of an international compact or agreement. P. 230.

19. Enforcement in this case of the policy of the State of New York would conflict with the federal policy, whether the State’s policy was premised on the absence of extraterritorial effect of the Russian decrees, the conception of the New York branch as a distinct juristic personality, or disapproval by New York of the Russian program of nationalization. P. 231.

20. Power over external affairs is not shared by the States; it is vested exclusively in the National Government. P. 233.

284 N.Y. 555, 32 N.E.2d 552, reversed.

CERTIORARI, 313 U.S. 553, to review a judgment affirming the dismissal of the complaint in a suit by the United States to recover a balance of the assets of the New York branch of a Russian insurance company. See 259 App.Div. 871, 20 N.Y.S.2d 665.