235 N.Y. 255, 139 N.E. 259

Court of Appeals of New York.

RUSSIAN SOCIALIST FEDERATED SOVIET REPUBLIC v. CIBRARIO et al.

March 6, 1923.

The Russian Soviet Republic, which the United States refuses to recognize, cannot sue in our courts, even if comity did not depend on recognition, in view of the reasons given by the State Department for refusing to recognize it.

[**259]   [*256]  Appeal from Supreme Court, Appellate Division, First Department.

[**260]  COUNSEL:  Osmond K. Fraenkel and Charles Recht, both of New York City, for appellant.

Daniel P. Hays, of New York City, for respondents.

[*257]  OPINION BY:  ANDREWS, J.

In Wulfsohn v. Russian Federated Soviet Republic, 234 N. Y. 372, 138 N. E. 24, we held that our courts would not entertain jurisdiction of an action brought without its consent against an existing foreign government, in control of the political and military power within its own territory, whether or not such government had been recognized by the United States. We have now to determine whether such a government may itself become a plaintiff here.

If recognized, undoubtedly it may. Republic of Honduras v. Soto, 112 N. Y. 310, 19 N. E. 845, 2 L. R. A. 642, 8 Am. St. Rep. 744; United States of America v. Wagner, L. R. 2 Ch. App. 582; King of Spain v. Machado, 4 Russ. 560; King of Prussia v. Kuepper’s Adm’r, 22 Mo. 550, 66 Am. Dec. 639. Conceivably this right may depend on treaty. But if no treaty to that effect exists the privilege rests upon the theory of international comity. This is so with regard to all foreign corporations. Hollis v. Drew Theological Seminary, 95 N. Y. 166; Bank of Augusta v. Earle, 13 Pet. 519, 10 L. Ed. 274;  [*258]  National Telephone Mfg. Co. v. DuBois, 165 Mass. 117, 42 N. E. 510, 30 L. R. A. 628, 52 Am. St. Rep 503. Their power to sue may be regulated as is done by section 15 of our General Corporation Law (Consol. Laws, c. 23). Paul v. Virginia, 75 U. S. (8 Wall.) 168. And except as limited by constitutional provisions the same thing is true of those not citizens of our state. Much more true is it that the right of a foreign government to sue is likewise based upon the same consideration. Neither a natural person nor a corporation, ordinarily we would not recognize it as a proper party plaintiff. Western & A. R. Co. v. Dalton Marble Works, 122 Ga. 774, 50 S. E. 978. It represents, however, the general interests of the nation over which it has authority. We permit it to appear and protect those interests as a body analogous to one possessing corporate rights, but solely because of comity. Republic of Honduras v. Soto, 112 N. Y. 310, 19 N. E. 845, 2 L. R. A. 642, 8 Am. St. Rep. 744; Hullet & Co. v. King of Spain, 1 Dow & Clark, 169, 175; Duke of Brunswick v. King of Hanover, 6 Beav. 1, 37; The Sapphire, 78 U. S. (11 Wall.) 164, 20 L. Ed. 127.

Comity may be defined as that reciprocal courtesy which one member of the family of nations owes to the others. It presupposes friendship. It assumes the prevalence of equity and justice. Experience points to the expediency of recognizing the legislative, executive, and judicial acts of other powers. We do justice that justice may be done in return.

‘What is termed the comity of nations is the formal expression and ultimate result of that mutual respect accorded throughout the civilized world by the representatives of each sovereign power to those of every other, in considering the effects of their official acts. Its source is a sentiment of reciprocal regard, founded on identity of position and similarity of institutions.’ Fisher, Brown & Co. v. Fielding, 67 Conn. 91, 108, 34 Atl. 714, 716 (32 L. R. A. 236, 52 Am. St. Rep. 270).

As defined by Webster, comity ‘is in general terms that there are between nations at peace with one another rights both national and individual resulting from the comity or courtesy due from one friendly nation to another. Among these is the right  [*259]  to sue in their courts respectively.’ 6 Webster Works, 117. It may, however, not be demanded as a right. It is yielded as a favor. Not an arbitrary favor; nor is it the favor of the courts.

‘It is not the comity of the courts, but the comity of the nation which is administered.’ Bank of Augusta v. Earle, 13 Pet. 519, 10 L. Ed. 274.

Rules of comity are a portion of the law that they enforce. Precedents mark the line that they should follow. Both in England and in the United States so universally and for such a length of time have actions by alien corporations and individuals been allowed that the right to bring them in a proper case has become fixed. Unless restrained by legislative fiat no court may now deny it. Hollis v. Drew Theological Seminary, 95 N. Y. 166, 175; Stone v. Penn Yan, K. P. & B. Ry. Co., 197 N. Y. 279, 90 N. E. 843, 134 Am. St. Rep. 879; Christian Union v. Yount, 101 U. S. 352, 25 L. Ed. 888. So long as the plaintiff does not reside in a country at war with the United States we inquire no further. The original basis of the right has fallen into the background. If trade is permitted between him and ourselves we do not ask whether he comes from Mexico or from France. But no like current of authority controls us in the case before us. Undisturbed the rule of comity is our only guide. This rule is always subject, however, to one consideration. There may be no yielding, if to yield is inconsistent with our public policy. We might give effect to the French decree in  [**261]  Gould v. Gould, 235 N. Y. 14, 138 N. E. 490, only because it was consonant with our theories of marriage and divorce. Such public policy may be interpreted by the courts. It is fixed by general usage and morality or by executive or legislative declaration. Especially is the definition of our relations to foreign nations confided not to the courts, but to another branch of the government. That branch determines our policy toward them. It only remains for the courts to enforce it.

The use of the word ‘comity’ as expressing the basis  [*260]  of jurisdiction has been criticized. It is, however, a mere question of definition. The principles lying behind the word are recognized. Whether or not we sum them up by one expression or another, the truth remains that jurisdiction depends upon the law of the forum, and this law in turn depends upon the public policy disclosed by the acts and declarations of the political departments of the government.

Does any rule of comity, then, require us to permit a suit by an unrecognized power? In view of the attitude of our government, should we permit an action to be brought by the Soviet government? To both queries we must give a negative answer. We may state at the outset that we find no precedent that a power not recognized by the United States may seek relief in our courts. Such intimations as exist are to the contrary. Statements are that ‘a recognized government may be a plaintiff.’ Republic of Honduras v. Soto, 112 N. Y. 310, 19 N. E. 845, 2 L. R. A. 642, 8 Am. St. Rep. 744; United States v. Wagner, L. R. 2 Ch. App. 582, 589. In King of Spain v. Oliver, Fed. Cas. No. 7,814, 14 Fed. 577, the Circuit Court noted the question, but refused to decide it. In City of Berne v. Bank of England, 9 Ves. Jr. 347, Lord Eldon expressed great doubt. So in Dolder v. Lord Huntingfield, 11 Ves. Jr. 283. In The Penza (D. C.) 277 Fed. 91, the present plaintiff was refused relief.

What, then, is the meaning and effect of recognition in its relation to comity? It is difficult to find a clear discussion of this question, either in reports or in text-books. Where a new government has seized power, ‘no official intercourse is possible between the powers refusing recognition and the state concerned.’ ‘Through recognition the other states declare that they are ready to negotiate with such individual (a new ruler) as the highest organ of his state.’ Oppenheim, International Law (3d Ed.) vol. 1, §§ 77, 342. Speaking of the recognition of a new state, Wheaton (International Law  [*261]  [2d Ed.] p. 39) says:

‘so long, indeed, as the new state confines its action to its own citizens and to the limits of its own territory, it may well dispense with such recognition. But if it desires to enter into the great society of nations, all the members of which recognize rights to which they are mutually entitled, and duties which they may be called upon reciprocally to fulfil, such recognition becomes essentially necessary to the complete participation of the new state in all the advantages of this society. * * * The new state becomes entitled to the exercise of its external sovereignty as to those states only by whom that sovereignty has been recognized.’

In Hyde’s International Law, vol. 1, § 37, is the statement that—

‘The mode of recognition is not material, provided there be an unequivocal act indicating clearly that the new state is dealt with as such and is deemed to be entitled to exercise the privileges of statehood in the society of nations.’

More assistance may be found in the reasons underlying various decisions of the courts as to the effect to be given to the acts of foreign governments. This effect depends upon our acknowledgment of the comity of nations. ‘The principle that the conduct of one independent government cannot be successfully questioned in the courts of another is as applicable to a case involving the title to property brought within the custody of a court, such as we have here, as it was held to be to the cases cited, in which claims for damages were based upon acts done in a foreign country, for it rests at last upon the highest considerations of international comity and expediency.’ Oetjen v. Central Leather Co., 246 U. S. 297, 303, 38 Sup. Ct. 309, 311 (62 L. Ed. 726); Mighell v. Sultan of Johore, 1 Q. B. 1894, 149; The Parlement Belge, 5 Pro. Div. 1880, 197. Therefore where comity exists between two nations, and no question of public policy arises, this rule is invariable. Yet in specific cases the question of recognition is thought controlling—recognition existing at the time the alleged  [*262]  wrongful act was done, or recognition later, which relates back to that time. Oetjen v. Central Leather Co., supra; Underhill v. Hernandez, 168 U. S. 250, 18 Sup. Ct. 83, 42 L. Ed. 456; Ricaud v. American Metal Co., 246 U. S. 304, 38 Sup. Ct. 312, 62 L. Ed. 733; The Gagara, L. R. Pro. Div. 1919, 95; The Annette, L. R. Pro. Div. 1919, 105. A most interesting case is Luther v. Sagor [1921] 3 K. B. 532. The Soviet Republic seized personal property belonging to the plaintiff. Then sold to the defendant, it was imported into England. There the plaintiff brought an action to recover it. The plaintiff succeeded in the lower court, there being no proof of the recognition of the Russian government. Later such recognition  [**262]  occurred, and the judgment because of that fact was reversed on appeal. In the course of his opinion Scrutton, L. J., says the title to the goods coming into the hands of a purchaser from the Russian government cannot be questioned. ‘This immunity follows from recognition as a sovereign state. Should there be any government which appropriates other people’s property without compensation, the remedy appears to be to refuse to recognize it as a sovereign state. Then the courts could investigate the title without infringing the comity of nations.’ Why? Obviously because in the absence of recognition no comity exists.

We reach the conclusion, therefore, that a foreign power brings an action in our courts not as a matter of right. Its power to do so is the creature of comity. Until such government is recognized by the United States no such comity exists. The plaintiff concededly has not been so recognized. There is, therefore, no proper party before us. We may add that recognition, and, consequently, the existence of comity, is purely a matter for the determination of the legislative or executive departments of the government. Who is the sovereign of a territory is a political question. In any case where that question is in dispute the courts are bound by the decision reached by those departments.  [*263]  Jons v. U. S., 137 U. S. 202, 11 Sup. Ct. 80, 34 L. Ed. 691; Luther v. Sagor, 3 K. B. 1921, 532, 556. It is not for the courts to say whether the present governments of Russia or Mexico or Great Britain should or should not be recognized. They are or they are not. That is as far as we may inquire. Nor is anything here decided inconsistent with Wulfsohn v. Soviet Republic, supra. Upon the facts in that case, if the defendant was not an existing government it might not be sued. There was no party before the court. If it were, as was alleged and admitted, the same result followed, not because of comity, but because an independent government is not answerable for its acts to our courts.

We are the more ready to reach this conclusion because to hold otherwise might tend to nullify the rule that public policy must always prevail over comity. More than once during the last 70 years our relations with one or another existing but unrecognized government have been of so critical a character that to permit it to recover in our courts funds which might strengthen it or which might even be used against our interests would be unwise. We should do nothing to thwart the policy which the United States has adopted. Yet, unless recognition is the test of the right to sue, we do not see why Maximilian, as emperor of Mexico, might not have maintined an action here.

With regard to the present Russian government the case is still stronger, even did comity not depend on recognition. We not only refuse to recognize it. Our State Department gives the reasons. Secretary Colby has stated them in an offical note, dated August 10, 1920. He begins by saying that our government will not participate in any plan for the expansion of the armistice negotiations between Russia and Poland into a general European conference, ‘which would in all probability involve two results, from both of which this country strongly recoils, viz.: The recognition of the Bolshevist regime, and a settlement of the Russian problem  [*264]  almost inevitably upon the basis of a dismemberment of Russia.’ He continues:

‘We are unwilling that, while it is helpless in the grip of a nonrepresentative government whose only sanction is brutal force, Russia shall be weakened still further by a policy of dismemberment, conceived in other than Russian interests. * * * The Bolsheviki, although in number an inconsiderable minority of the people, by force and cunning seized the powers and machinery of government, and have continued to use them with savage oppression to maintain themselves in power. * * * It is not possible for the government of the United States to recognize the present rulers of Russia as a government with which the relations common to friendly governments can be maintained. * * * The existing reginme in Russia is based upon the negation of every principle of honor and good faith, and every usage and convention, underlying the whole structure of international law, the negation, in short, of every principle upon which it is possible to base harmonious and trustful relations, whether of nations or of individuals. The responsible leaders of the regime have frequently and openly boasted that they are willing to sign agreements and undertakings with foreign powers while not having the slightest intention of observing such undertakings or carrying out such agreements. * * * They have made it quite plain that they intend to use every means * * * to promote revolutionary movements in other countries. * * * In the view of this government, there cannot be any common ground upon which it can stand with a power whose conceptions of international relations are so entirely alien to its own, so utterly repugnant to its moral sense. There can be no mutual confidence or trust, no respect even, if pledges are to be given and agreements made with a cynical repudiation of their obligations already in the mind of one of the parties. We cannot recognize, hold official relations with, or give friendly reception to the agents  [*265]  of a government which is determined and bound to conspire against our institutions, whose diplomats will be the agitators of dangerous revolt, whose spokesmen say that they sign agreements with no intention of keeping them.’

 [**263]  Our government has not receded from this position. Secretary Hughes, in rejecting trade proposals of the Soviet, said on March 25, 1921:

‘It is only in the productivity of Russia that there is any hope for the Russian people, and it is idle to expect resumption of trade until the economic bases of production are securely established. Production is conditioned upon the safety of life, the recognition by firm guaranties of private property, the sanctity of contract and the rights of free labor.’

And he postpones any consideration of trade relations until such time as our government has convincing evidence of fundamental changes that will fulfill these conditions.

In the fact of these declarations it is impossible to hold that to-day any such relations exist between the United States and Russia as call upon our courts to enforce rules in favor of the latter depending on the comity of nations.

The judgment appealed from should be affirmed, with costs.

HISCOCK, C. J., and HOGAN, CARDOZO, POUND, McLAUGHLIN, and CRANE, JJ., concur.

Judgment affirmed, etc.