HEINE V. NEW YORK LIFE INS.

CO
HEINE V. NEW YORK LIFE INS. CO.

NO. 6405.
CIRCUIT COURT OF APPEALS, NINTH CIRCUIT.

MAY 25, 1931.

APPEAL FROM THE DISTRICT COURT OF THE UNITED STATES FOR THE
DISTRICT OF OREGON; ROBERT S. BEAN, JUDGE.
ACTION BY HENRY HEINE AGAINST THE NEW YORK LIFE INSURANCE
COMPANY. FROM AN ORDER OF DISMISSAL [ 45 F.2D 426 ], PLAINTIFF
APPEALS.
AFFIRMED.
THIS IS AN APPEAL FROM AN ORDER OF DISMISSAL GRANTED BY THE
COURT IN THE EXERCISE OF ITS POWER OF DISCRETION TO RETAIN OR
REJECT JURISDICTION. THE ACTION WAS BROUGHT IN THE STATE COURT
OF OREGON AND REMOVED BY THE APPELLEE TO THE FEDERAL COURT.
IT IS BASED ON INSURANCE POLICIES, DATED NOVEMBER 10, 1911,
ISSUED IN GERMANY TO A GERMAN RESIDENT AND CITIZEN, WRITTEN IN
GERMAN LANGUAGE, AND PAYABLE IN GERMANY IN THE CURRENCY OF
THAT COUNTRY. THE APPELLANT SEEKS TO RECOVER AS DAMAGES THE
CASH SURRENDER VALUE OF THE POLICIES.

THE ANSWER DENIES LIABILITY; PLEADS STIPULATIONS IN THE POLICIES

DESIGNATING CERTAIN SPECIFIED COURTS IN GERMANY AS HAVING
EXCLUSIVE

JURISDICTION;

PLEADS

NOVATION,

IN

THAT

KRONOS

DEUTSCHE LEBEN-VERSICHERUNGS AKTIEN-GESELLSCHAFT, A GERMAN

INSURANCE COMPANY, ASSUMED THE LIABILITY OF THE APPELLEE
UNDER THE POLICIES, WITH THE ASSENT OF THE APPELLANT; PLEADS
THE CURRENCY LEGISLATION OF GERMANY AND THE VALORIZATION
LAWS, STEPS TAKEN BY THE GERMAN AUTHORITIES TO RATE UP
CERTAIN CLASSES OF CONTRACTS PAYABLE IN MARKS, INCLUDING
INSURANCE

POLICIES

ISSUED

IN

GERMANY;

PLEADS

MUTUAL

ARRANGEMENT BETWEEN THE APPELLEE AND THE GERMAN INSURANCE

AUTHORITIES, ACTING ON BEHALF OF THE GERMAN POLICYHOLDERS, BY
WHICH A FUND WAS ESTABLISHED AND PLACED IN THE CUSTODY OF THE
GERMAN INSURANCE AUTHORITIES TO PAY AND ADJUST ALL CLAIMS ON
POLICIES ISSUED BY THE APPELLEE IN GERMANY, INCLUDING THE
POLICIES IN LITIGATION. ATTACHED TO THE ANSWER ARE CERTAIN
AFFIDAVITS AND COPIES OF THE GERMAN LAWS AND DECISIONS OF THE
GERMAN COURTS AND THE GERMAN FEDERAL INSURANCE BOARD; A
DECISION OF THE GERMAN FEDERAL INSURANCE BOARD FIXING THE
AMOUNT

OF

THE

CONTRIBUTION

OF

THE

APPELLEE

TO

THE

VALORIZATION FUND, FOR THE PAYMENT OF ALL POLICIES ISSUED BY IT

IN GERMANY, AS $3,000,000

*383383

(12,000,000 MARKS) IN ADDITION TO

2,000,000 MARKS WHEN CONCESSION WAS GRANTED, 11,607,000 MARKS

TO MEET WAR LOSSES AND 37,107,737 MARKS PAID TO "KRONOS" AT THE

TIME THE GERMAN BUSINESS OF THE APPELLEE WAS TAKEN OVER; A

DISTRIBUTION PLAN ISSUED BY THE GERMAN FEDERAL INSURANCE
BOARD FOR THE INSURANCE POLICIES ISSUED BY THE APPELLEE, AND A
TABLE OF THE PERCENTAGES OF THE GOLD MARK VALUE AT WHICH THE
POLICIES OF THE VARIOUS COMPANIES WERE TO BE RATED UP FOR
VALUE,

LISTING

APPROXIMATELY

FIFTY

COMPANIES,

INCLUDING

APPELLEE. ALL PREMIUMS COLLECTED IN GERMANY, TOGETHER WITH

SUMS DEPOSITED BY THE APPELLEE FOR LICENSE TO DO BUSINESS,
WERE IMPOUNDED IN A RESERVE DEPOSITORY AND INVESTED UNDER
GERMAN

APPROVAL

FOR

PROTECTION

OF

POLICYHOLDERS.

THE

AFFIDAVITS AND STATEMENTS IN THE RECORD ARE BY AGREEMENT TO

BE CONSIDERED AS A PART THEREOF. THEY ALSO RECITE THAT THE
MARK WAS THE SOLE CIRCULATING MEDIUM OF EXCHANGE AND LEGAL
TENDER CURRENCY OF GERMANY UNTIL THE PASSAGE OF THE COINAGE
LAW OF AUGUST, 1924, WHICH CREATED AND ESTABLISHED FOR THE
GERMAN REICH AN ENTIRELY NEW AND DISTINCT CURRENCY CALLED
THE REICHSMARK, MAKING THE REICHSMARK THE SOLE LEGAL TENDER
CURRENCY OF GERMANY AND PROVIDING FOR THE CONVERSION OF THE
OLD MARK INTO THE NEW REICHSMARK AT THE CONVERSION RATIO OF
ONE-MILLION-MILLION OF THE FORMER FOR ONE OF THE LATTER; THAT
BY A DECREE OF SEPTEMBER 28, 1914, CONTRACTS MADE PRIOR TO
JULY 1, 1914, CALLING FOR PAYMENT IN GOLD WERE DECLARED NOT
BINDING; THAT THE REICHS CHANCELLOR WAS TO DECIDE AS TO THE
DATE WHEN THIS DECREE SHOULD BECOME INEFFECTIVE; THAT THE

DECREE HAS NOT BEEN REPEALED, NOR HAS THE SUSPENSION OF THE
REDEMPTION OF THE GERMAN TREASURY BILLS AND REICHSBANK GOLD
NOTES BEEN LIFTED, AND THAT THE LAWS OF AUGUST, 1924, IN
CONNECTION WITH THE LOSS OF THE WAR BY GERMANY, CONSTITUTE
THE

PRIMARY

CAUSE

OF

THE

SUBSEQUENT

CATASTROPHIC

DEPRECIATION OF THE GERMAN MARK. (THE POLICIES IN SUIT WERE

PAYABLE IN THE OLD CURRENCY, MARK D. RWG.) ALSO ATTACHED IS AN
IRREVOCABLE POWER OF ATTORNEY TO CERTAIN NAMED PARTIES,
WHICH AUTHORIZES AND EMPOWERS THEM TO SUE FOR, COLLECT,
RECEIVE, AND RECEIPT FOR ALL SUMS DUE OR OWING UNDER THE
POLICIES, OR COMPROMISE THE SAME, IN CONSIDERATION OF THE
ASSIGNMENT AND TRANSFER TO THEM OF AN UNDIVIDED 25 PER CENT.
INTEREST IN THE POLICIES, AND ALL RIGHTS ACCRUING THEREUNDER.
IT IS STATED THAT THERE ARE NO WITNESSES TO ANY OF THE
TRANSACTIONS

RESIDENT

IN

THE

STATE

OF

OREGON;

THAT

PRACTICALLY ALL OF THE WITNESSES RESIDE IN GERMANY OR IN THE

STATE OF NEW YORK; THAT NO RECORDS OF THE APPELLEE ARE IN THE
STATE

OF

OREGON;

THAT

ALL

OF

APPELLEE'S

ORIGINAL

DATA,

CORRESPONDENCE, AND DOCUMENTS RELATING TO ITS BUSINESS IN

GERMANY AND POLICIES ISSUED THERE WERE KEPT IN GERMANY AND
STILL

ARE

THERE

IN

THE

POSSESSION

OF

THE

"KRONOS"

LIFE

INSURANCE COMPANY; THAT TO DEFEND THIS ACTION IN THE COURTS

OF

OREGON

WOULD

IMPOSE

UPON

THE

APPELLEE

GREAT

AND

UNNECESSARY DIFFICULTY, INCONVENIENCE AND EXPENSE; THAT THE

APPELLEE MAINTAINS AND INTENDS TO CONTINUE IN GERMANY A

GENERAL

REPRESENTATIVE

AND

ATTORNEY

IN

FACT,

APPOINTED

PURSUANT TO THE INSURANCE LAWS OF GERMANY, UPON WHOM LEGAL

PROCESS MAY BE SERVED; THAT IN ALL ACTIONS COMMENCED IN
GERMANY AT NO TIME HAS THE JURISDICTION OF THE GERMAN COURTS
BEEN EVADED OR ATTEMPT MADE TO INVALIDATE SERVICE; THAT IN ALL
SUCH ACTIONS THE GERMAN COURTS HAVE ASSUMED JURISDICTION;
THAT SUCH COURTS ARE OPEN AND FUNCTIONING AND ARE COMPETENT
AND READY TO TAKE JURISDICTION OF JUSTICIABLE MATTERS. IT IS
FURTHER SHOWN THAT THERE ARE NOW PENDING IN THE COURTS OF
OREGON, AGAINST THE APPELLEE, CASES INVOLVING 192 POLICIES
ISSUED TO GERMAN CITIZENS WHO AT ALL TIMES HAVE BEEN RESIDENT
IN AND NOW RESIDE IN GERMANY, ALL PAYABLE IN GERMANY IN GERMAN
CURRENCY, AND SUBJECT TO GERMAN LAW, AND, IN THE SAME COURT,
ACTIONS

AGAINST

THE

GUARDIAN

LIFE

INSURANCE

COMPANY

INVOLVING 50 POLICIES, AND AGAINST THE GUARDIAN LIFE INSURANCE

COMPANY AND THE APPELLEE ACTIONS INVOLVING 18 POLICIES; THAT
PAUL HERRMANN, APPELLANT IN THE COMPANION CASE SUBMITTED
HEREWITH, 50 F.2D 387, A RESIDENT AND CITIZEN OF GERMANY, IS
PLAINTIFF IN MANY OF THESE CASES; THAT IN ONE CASE BROUGHT BY
HIM THERE ARE INVOLVED 115 POLICIES, IN AS MANY SEPARATE CAUSES
OF ACTION; THAT ANOTHER CASE INVOLVES 39 POLICIES ISSUED TO
DIFFERENT PERSONS, AND ANOTHER

INVOLVES

14

POLICIES, AND

OTHERS OF LESS NUMBER. THE RECORD ALSO DISCLOSES THAT TWO

CASES WERE BROUGHT AGAINST THE APPELLEE IN THE STATE OF NEW

YORK ON LIKE POLICIES AND THAT THE NEW YORK COURT DECLINED TO
RETAIN JURISDICTION AND DISMISSED THE SAME. HIGGINS V. NEW YORK
LIFE

INS.

CO., 220

APP.

DIV.

760, 222

N.Y.S.

819.

IT APPEARS THAT FOR SEVERAL YEARS A VIGOROUS CAMPAIGN HAS

BEEN CONDUCTED IN GERMANY TO SECURE CONTROL OF POLICIES
ISSUED IN GERMANY BY AMERICAN COMPANIES, APPROXIMATELY 28,000
FOR

PROSECUTION

IN

THE

AMERICAN

COURTS,

UPON

THE

REPRESENTATION THAT A MUCH LARGER RECOVERY MIGHT BE HAD IN

THE AMERICAN COURTS THAN FROM GERMAN COURTS OR GERMAN
ADMINISTRATIVE

BODIES.

(THE

TERM

MEMORANDUM MEANS UNITED STATES.)

"AMERICAN"

IN

THIS

*384384

IT FURTHER APPEARS THAT THERE IS PENDING IN THE STATE COURT

FOR

MULTNOMAH

COUNTY,

OR.,

AN

ACTION

BROUGHT

BY

ONE

LUETJOHANN, A CITIZEN AND RESIDENT OF GERMANY, AGAINST THE

APPELLEE, ON A LIKE POLICY, IN WHICH CASE A MOTION HAS BEEN
FILED

TO

COMPEL THE APPELLEE

TO

BRING

TO

PORTLAND

FOR

INSPECTION BY PLAINTIFF'S COUNSEL, WHO ALSO REPRESENTS ALL

THE PLAINTIFFS IN THE VARIOUS ACTIONS BROUGHT ON THE GERMAN
POLICIES, THE FOLLOWING:
"ALL

OF

THE

DAY

BOOKS,

JOURNALS

AND

LEDGERS

KEPT

BY

DEFENDANT DURING THE YEARS 1922 TO 1928, WHETHER IN BOOK FORM

OR OTHERWISE; AND

"ALL BALANCE SHEETS AND TRIAL BALANCES;

"ALSO ALL LISTS, REGISTERS AND OTHER RECORDS CONTAINING THE
NAMES OF ALL POLICYHOLDERS AND THE AMOUNTS AND KINDS OF
INSURANCE ISSUED AND IN EFFECT DURING SAID YEARS;
"ALL OTHER BOOKS, PAPERS, DOCUMENTS AND RECORDS IN THE
POSSESSION

OF

DEFENDANT

WHICH

DISCLOSE

THE

AMOUNT

OF

PROFITS MADE EACH YEAR BY DEFENDANT AND WHICH DISCLOSE THE

PRESENT WHEREABOUTS, AMOUNT AND SITUS OF THE ASSETS AND
SURPLUS OF THE DEFENDANT AND THE INVESTMENTS THEREOF;
"ALL BOOKS OF ACCOUNT, PAPERS, DOCUMENTS AND RECORDS IN THE
POSSESSION OF THE DEFENDANT WHICH DISCLOSE THE UNIT VALUE,
I.E., AMERICAN DOLLARS OR OTHER UNITS, IN WHICH THE PROFITS,
SURPLUSES AND ASSETS

OF

THE

DEFENDANT WERE

EARNED

BY

DEFENDANT AND WERE KEPT DURING SAID YEARS AND ARE NOW KEPT
AND FIGURED AND CALCULATED IN SAID BOOKS OF ACCOUNTS."
IT

APPEARS

THAT

THE

BOOKS

AND

RECORDS

SO

REQUESTED

OF

ACCOUNTS,

COMPRISE:
"HUNDREDS

OF

VOLUMES

CONSISTING

OF

MANY

OF

KINDS

CURRENT
OF

CASH

BOOKS
BOOKS,

JOURNALS

AND

LEDGERS, KEPT BY THE NUMEROUS DEPARTMENTS OF DEFENDANT'S

BUSINESS, AND THEY ALSO INCLUDE HUNDREDS OF THOUSANDS OF
UNBOUND SHEETS OF ACCOUNTS. THESE DAY BOOKS, JOURNALS,
LEDGERS

AND

ACCOUNTS

CONSTITUTE

THE

CURRENT

BOOKS

OF

ACCOUNT OF THE DEFENDANT IN ITS VARIOUS DEPARTMENTS. THEY ARE

IN CONSTANT DAILY USE BY SCORES OF THE ACCOUNTANTS AND

ACTUARIES OF THE COMPANY AND THEY COULD NOT BE REMOVED FROM
DEFENDANT'S NEW YORK OFFICE WITHOUT HOPELESSLY DISRUPTING
ALL OF THE DEPARTMENTS OF THE DEFENDANT'S BUSINESS AND
STOPPING THE COMPANY'S OPERATIONS.
"THE `LISTS, REGISTERS AND OTHER RECORDS CONTAINING THE NAMES
OF ALL POLICYHOLDERS AND THE AMOUNTS AND KINDS OF INSURANCE
ISSUED AND IN EFFECT DURING THE YEARS 1922 TO 1928, INCLUSIVE,'
DEMANDED BY PLAINTIFF, ARE KEPT BY DEFENDANT ONLY IN CARD
FORM. THERE ARE SEPARATE CARDS FOR EACH KIND OF INFORMATION
CONCERNING EACH POLICY, INCLUDING INDEX CARDS, BRIEF CARDS,
MORTALITY CARDS, PREMIUM CARDS AND DIVIDEND CARDS. THESE
CARDS ARE

KEPT IN DIFFERENT DEPARTMENTS AND

EACH

CARD

CONTAINS ONLY SUCH INFORMATION CONCERNING THE POLICY AS IS

NECESSARY FOR THE PURPOSE OF THE DEPARTMENT IN WHICH IT IS
KEPT. * * * THE COMPANY HAD OUTSTANDING DURING THE PERIOD
COVERED BY PLAINTIFF'S REQUEST MORE THAN 2,500,000 POLICIES. IT
WOULD BE NECESSARY, THEREFORE, IN ORDER TO MEET PLAINTIFF'S
REQUEST, * * * TO SEND TO OREGON MANY MILLIONS OF POLICY CARDS,
WHICH CONSTITUTE ALL OF DEFENDANT'S RECORDS CONCERNING ITS
INDIVIDUAL POLICIES ISSUED AND IN EFFECT DURING THE YEARS 1922
TO

1928.

THESE

CARDS

ARE

IN

DAILY

USE

BY

HUNDREDS

OF

DEFENDANT'S EMPLOYEES IN MAKING LOANS, COMPUTING DIVIDENDS,

CONVERTING POLICIES, PAYING CLAIMS, ANSWERING INQUIRIES AND

OTHERWISE DEALING WITH ITS POLICIES AND POLICYHOLDERS. THE

REMOVAL OF THESE CARDS FROM THE COMPANY'S NEW YORK OFFICE
WOULD ABSOLUTELY STOP THE COMPANY'S FUNCTIONING IN REGARD
TO ITS POLICIES AND POLICYHOLDERS.
"SOME IDEA OF THE VOLUME OF BOOKS AND RECORDS REQUESTED BY
PLAINTIFF MAY BE GLEANED FROM A RECENT EXPERIENCE OF THE NEW
YORK LIFE INSURANCE COMPANY IN MOVING ITS HEADQUARTERS FROM
346 BROADWAY TO ITS PRESENT HEADQUARTERS, 51 MADISON AVENUE.
THE DISTANCE BETWEEN THE OLD HEADQUARTERS AND THE NEW IS
ABOUT

ONE

AND

ONE-HALF

MILES.

IT

TOOK

THIRTY

TRUCKS,

IN

CONSTANT OPERATION FOR FOUR DAYS AND NIGHTS, TO MOVE THE

BOOKS AND RECORDS OF THE COMPANY.
"THE

EXPERIENCE

OF

THE

AUDITORS

OF

THE

NEW

YORK

STATE

DEPARTMENT OF INSURANCE IS ALSO INSTRUCTIVE ON THIS POINT. THE

AUDITORS EXAMINE THE ACCOUNTS OF THE COMPANY EVERY THREE
YEARS.

IT

TAKES

25

OR

30

ACCOUNTANTS

FROM

THE

STATE

DEPARTMENT OF INSURANCE A PERIOD OF APPROXIMATELY FOUR

MONTHS TO COVER THE BOOKS AND RECORDS OF THE COMPANY FOR A
THREE-YEAR PERIOD."
IT APPEARS THAT THE APPELLATE DIVISION OF THE GERMAN COURTS
REVIEWED THE HISTORY OF THE ACTIVITIES OF THE APPELLEE AND
HELD THAT IT HAD AT ALL TIMES BEEN UNDER THE SUPERVISION OF THE
GERMAN INSURANCE BOARD, REFERRED TO THE FACT THAT IT HAD AN
OFFICE AND GENERAL REPRESENTATIVE IN GERMANY AND LARGE

ASSETS, IN ADDITION TO THOSE TRANSFERRED TO "KRONOS," AND

SAID: "AS THE COURT BELOW EXPRESSLY STATED, THE COMPANY
ALWAYS

FULFILLED

EVERY

ORDER

OF

THE

GERMAN

INSURANCE

BOARD." AND IT APPEARS THAT THE LEGAL TENDER STATUS OF

THE

*385385

GERMAN

MARK

WAS

CONFIRMED

BY

DECISION

OF

THE

GERMAN SUPREME COURT APRIL 16, 1921, REPORTED IN DECISIONS OF

THE SUPREME COURT IN CIVIL CASES, VOL. 102, P. 98, HOLDING THAT
THE STIPULATION OF THE CONTRACT WITH RELATION TO THE PAYMENT
IS BINDING, AND THAT THE GERMAN COURTS HAVE UNIFORMLY HELD
THAT

INSURANCE

POLICIES

ISSUED

IN

GERMANY

TO

GERMAN

NATIONALS ARE GERMAN CONTRACTS AND THAT THEIR CONSTRUCTION,

THE EXTENT OF THE LIABILITY AND THE REMEDY OR DISCHARGE
THEREUNDER ARE
FERENSDORFF,

DETERMINABLE EXCLUSIVELY BY GERMAN LAW.

NEE

HERZ

V.

SWISS

LIFE

INSURANCE

ANNUITY

INSTITUTE, DECIDED BY THE SUPREME COURT DECEMBER 18, 1929;

MESSERSCHMITT V. N Y LIFE INS. CO., DECIDED BY THE BERLIN COURT
OF APPEALS MARCH 12, 1930; HARDT V. N.Y. LIFE INS. CO., DECIDED BY
THE SAME COURT ON THE SAME DATE; MARX V. N.Y. LIFE INS. CO.,
DECIDED BY THE DISTRICT COURT, MAINZ (GERMANY) JANUARY 27, 1930;
PROTECTIVE ASSN. OF HOLDERS OF FOREIGN INSURANCE POLICIES V.
SWISS LIFE INSURANCE ANNUITY INSTITUTE, DECIDED BY THE MUNICH
COURT OF APPEALS APRIL 15, 1929 (AFFIRMED BY THE SUPREME COURT
FEBRUARY 21, 1930); DAUNERT V. GUARDIAN LIFE INS. CO., DECIDED BY
THE BERLIN COURT OF APPEALS JULY 11, 1928; DECISION OF THE

GERMAN INSURANCE BOARD OCTOBER 25, 1928, IN THE MATTER OF NEW

YORK LIFE INSURANCE COMPANY, AFFIRMED BY DECISION OF THE
APPELLATE DIVISION FEBRUARY 13, 1929. THE FOLLOWING DECISIONS
BY FRENCH, AUSTRIAN, JUGOSLAVIAN AND OTHER COURTS, AND BY THE
TRIPARTITE CLAIMS

COMMISSION, OF WHICH JUDGE PARKER WAS

CHAIRMAN, ARE CITED BY APPELLEE TO THE SAME EFFECT: CREDIT

LYONNAIS V. CREDIT NATIONAL, COUR D'APPEL DE PARIS, DECIDED
FEBRUARY 18, 1927; MASLOVA V. URBAINE LIFE INS. CO. (4TH CHAMBER,
TRIBUNAL OF COMMERCE, DEPT. OF THE SEINE, PARIS), DECIDED JULY
19, 1926, REPORTED FOL. 156, CASE 6; BAUCHON V. CREDIT LYONNAIS
(1ST CHAMBER, CIVIL COURT), DECIDED OCTOBER 26, 1925, AFFIRMED
BY COURT OF APPEALS OF PARIS, DALLOZ LAW REPORTS, JUNE 17,
1927;

BANQUE

HYPOTHECAIRE

DE

BALE

V.

RIEGART,

COUR

DE

CASSATION, DECIDED JANUARY 23, 1924, REPORTED IN GAZETTE DES

TRIBUNAUX

APRIL

28,

29,

1924;

BANQUE

HYPOTHECAIRE

V. RIFF,

DECIDED JANUARY 11, 1926, DALLOZ L.R. 1926, P. 85; GHAN V. ORLOFF,
DALLOZ L.R. 1927, P. 62; DECISION OF SUPREME COURT OF AUSTRIA,
JANUARY 18, 1927, OB. III 993-28 "ZENTRALBLATT" NO. 102 EX 1927;
DECISION OF MAY 25, 1927, BY TRIPARTITE CLAIMS COMMISSION, 21 AM.
JOURNAL INTERNATIONAL LAW, 610.
THIS BRIEF STATEMENT OF THE RECORD, MADE UP OF AFFIDAVITS AND
DOCUMENTS, IS NOT DENIED, WHILE THE MATERIAL PARTS OF THE
ANSWER ARE DENIED BY THE REPLY. IT HAS BEEN SET OUT TO THE END

THAT THE HISTORY OF THE ISSUE AND PROCEDURE CAN BE MORE FULLY
APPRECIATED.
C.T. Haas and E.B. Seabrook, both of Portland, Or., for appellant.
Huntington, Wilson Huntington and Clark Clark, all of Portland, Or., for appellee.
Before WILBUR and SAWTELLE, Circuit Judges, and NETERER, District Judge.

NETERER, District Judge (after stating the facts).

The agency in Germany was established as a distinct entity, a German creation under German law.
A reserve fund was made and all premiums received were placed in that fund and invested in
Germany under German official approval. Upon creation of "Kronos," all funds and property of
appellee in Germany were delivered to and supervision and execution of power assumed by the
German Federal Insurance Board, and additional deposits made by the appellee, as required by the
German valorization laws, in accordance with the decisions of the German Federal Insurance Board.
The laws in relation thereto have been interpreted to apply to like policies, and many similar cases
are now pending before the German courts, they being open, able, competent, and efficient, and the
German Federal Insurance Board being active and fully functioning.
It is obvious that this litigation is not the normal outgrowth of usual business activity and relation, but
that it is the creation of activity to secure representation of some 28,000 insurance policies executed
in Germany by American companies, written in the German language, in the relation of collection
agent or agencies, and file actions thereon in the state and federal courts of the United States, an
indirect appeal from the German judiciary and the German Federal Insurance Board.
Incidentally, it may be said that the courts of the United States have uniformly applied the law of the
place to insurance contracts. Orient Insurance Co. v. Daggs, 172 U.S. 557, 19 S. Ct. 281, 43 L. Ed.
552; Mutual Life Ins. Co. of N.Y. v. Cohen, 179 U.S. 262, 21 S. Ct. 106, 45 L. Ed. 181; Mutual Life
Ins. Co. v. Hill, 193 U.S. 551, 24 S. Ct. 538, 48 L. Ed. 788; Northwestern Mut. Life Ins. Co. v.
McCue, 223 U.S. 234, 32 S. Ct. 220, 56 L. Ed. 419, 38 L.R.A. (N.S.) 57. *386386 And, when suit was
entertained, the cause of which arose in a foreign country, the courts granted relief according to the
laws of the country where the action arose. Slater v. Mexican Nat. Ry. Co., 194 U.S. 120, 24 S. Ct.
581, 48 L. Ed. 900. It has been held that discharge under a foreign obligation in accordance with the
foreign law is a complete defense. Zimmerman v. Sutherland, 274 U.S. 253, 47 S. Ct. 625, 71 L. Ed.
1034. It has also been held that the courts of the United States will not inquire into the validity,
wisdom or justice of the laws of a foreign country, or the administration of foreign agencies. League
v. De Young, 52 U.S. (11 How.) 185, 13 L. Ed. 657; Canada Southern Ry. Co. v. Gebhard, 109 U.S.
527, 3 S. Ct. 363, 27 L. Ed. 1020; Underhill v. Hernandez, 168 U.S. 250, 18 S. Ct. 83, 42 L. Ed. 456;
Hewitt v. Speyer (C.C.A.) 250 F. 367.

Nor does it appear that enlarged rights may be obtained over the German law should a suit by a
policyholder be entertained by the courts of the United States. Sutherland v. Mayer, 271 U.S. 272, 46
S. Ct. 538, 70 L. Ed. 943; Deutsche Bank v. Humphrey, 272 U.S. 517, 47 S. Ct. 166, 71 L. Ed. 383;
see, also, Zimmerman v. Sutherland, supra. Such holding is in harmony with other courts. See,
Chesterman's Trust, (1923) 2 Chancery 466, where the court had before it a debt payable in German
marks which had greatly depreciated, and it was held that it might be paid in the depreciated marks
or in their exchange value converted into British currency. The same rule was applied in British Bank
v. Russian Bank, (1921) 38 Times Law Reports 65, in which Mr. Justice Russell said that he "had
great sympathy with the defendants, but it must be remembered that the same causes that caused
the fall in the value of roubles had produced great depreciation in the plaintiff's securities." This was
approved in Anderson v. Equitable Assurance Society, (1926) 134 Law Times 557.
It is asserted by appellant that, jurisdiction being apparent on the face of the record, it may not be
challenged by motion but must be by plea, and that when, as here, jurisdiction is challenged by plea,
by the answer, and put in issue by the reply, issue must be submitted to the jury for decision on the
merits, and that there is no precedent for the order of the trial court.
As to the last objection, to have a precedent there must be an antecedent case; but the lack thereof
does not defeat a right or privilege. No fault can be found with the cases cited by the appellant, the
following of which are the more prominent: Farmington v. Pillsbury,114 U.S. 138, 5 S. Ct. 807, 29 L.
Ed. 114; Hartog v. Memory, 116 U.S. 588, 6 S. Ct. 521, 29 L. Ed. 725; Mexican Central Railway Co.
v. Pinkney, 149 U.S. 194, 13 S. Ct. 859,37 L. Ed. 699; City Railway Co. v. Citizen's Street Railroad
Co., 166 U.S. 557, 17 S. Ct. 653, 41 L. Ed. 1114; Union Mutual Life Insurance Co. v. Kirchoff, 169
U.S. 103, 18 S. Ct. 260, 42 L. Ed. 677; York County Sav. Bank v. Abbot (C.C.) 131 F. 980. These
cases do not point the way. One sustains dismissal when the fact appears to a legal certainty;
another, where a party is collusively added; another holds that the evidence considered must be
pertinent to the issue, or to the inquiry by the court; another holds that where there is reasonable
plausibility of bona fide claim, jurisdiction will be passed to trial on the merits, and another is one
where the court holds that claim rightly viewed unfounded must be denied.
Every requirement appears to be met substantially by the record. Process in this case was served
upon the statutory agent of the appellee in Oregon, appointed as a condition to do business in that
state and for the convenience and protection of residents to whom policies may be issued and afford
them access to the courts of the state or district.
The appellant contends that, notwithstanding the agreement that the German courts shall have
exclusive jurisdiction, such agreement is not binding on the federal courts, vested with their
jurisdiction by the United States Constitution, of which they cannot be deprived by foreign laws or
agreement. The appellant also contends that these are not actions upon the policies. But, whatever
the designation may be, the basis is the policies.
No alien has a constitutional right to sue in the United States courts. Kline v. Burke Construction
Co., 260 U.S. 226, 43 S. Ct. 79, 67 L. Ed. 226, 24 A.L.R. 1077. The United States District Courts
have such jurisdiction as the Congress confers. 28 USCA 41, grants jurisdiction as follows:

"First. Of all suits of a civil nature, at common law or in equity * * * between citizens of a State and
foreign States, citizens, or subjects. * * *
"Third. Of all civil causes of admiralty and maritime jurisdiction, saving to suitors in all cases the right
of a common-law remedy. * * *" *387387
Civil cases and actions in admiralty and maritime jurisdiction have equal status, and the courts have
uniformly, where the question has arisen, declined to entertain jurisdiction in admiralty suits by
nonresidents when in the discretion of the court it would be inconvenient and inexpedient to do so.
And no distinction has been made to civil cases.
Nor is the right to challenge the jurisdiction or to invite the discretion of the court waived or forfeited
by removal from the state to the federal court, or the right of the court, after issue joined, to make
investigation on notice and, in its discretion, decline jurisdiction after such inquiry. 28 USCA, 81,
provides that in all suits removed the court shall proceed as if the suit had been originally
commenced in the district court and the same proceedings had been taken in such suit in said
district court as shall have been had therein in said state court prior to its removal.
Upon the face of the record the district court had jurisdiction when the case came to it from the state
court. When the issue first came to its attention, and upon inquiry and examination, the court
became cognizant of the status and relation and no doubt had inherent power to protect itself from a
deluge of litigation by nonresidents, inspired by contingent retainers to avoid or overcome foreign
laws and interpretation and application thereof by foreign courts of the country of the situs of the
contract; and it had the power to prefer resident litigants of the district in access to overcrowded
calendars, for, as Justice Holmes said in Douglas v. New York, N.H. H.R. Co., 279 U.S. 377, 387, 49
S. Ct. 355, 356, 73 L. Ed. 747: "There are manifest reasons for preferring residents in access to
often overcrowded Courts, both in convenience and in the fact that broadly speaking it is they who
pay for maintaining the Courts concerned"; and it had the power to prevent imposition upon its
jurisdiction and use of the court as a "cover for injustice to the defendants" (Cuba R. Co. v.
Crosby, 222 U.S. 473, 479, 32 S. Ct. 132, 133, 56 L. Ed. 274, 38 L.R.A. (N.S.) 40) by reason of the
enormous expense involved in bringing across the continent witnesses from Germany and New York
and the records of appellee which plaintiff demands as necessary in another case and, if so, must
also be necessary in this case, the removal of which would destroy the ability of the appellee,
representing more than 2,500,000 policyholders, to function.
Comity between the United States and Germany should also have consideration.
With the foregoing, nothing can be added to the opinion of Judge Robert S. Bean, who at the time of
his recent demise was the dean of the American bench, and whose death terminated a creditable
judicial career of more than forty-eight years on the state and federal bench. His opinion is reported
in (D.C.) 45 F.2d 426, and is adopted as a part of the opinion of the court.
Affirmed.