Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-1812 August 27, 1948

EREMES KOOKOORITCHKIN, petitioner,

vs.
THE SOLICITOR GENERAL, oppositor.

First Assistant Solicitor General Roberto A. Gianzon and Solicitor Florencio Villamor for appellant.
L. D. Lockwood and Manuel O. Chan for appellee.

PERFECTO, J.:

In August, 1941, appellee filed with the lower court a petition for naturalization, accompanied with supporting affidavits of two citizens,
copy of a declaration of intention sworn in July, 1940, and proper notice of the hearing. The petition was finally set for hearing on
December 18, 1941, but it was held on that date because the province was invaded by the Japanese forces on December 14, and the
case remained pending until the records were destroyed during the military operations for liberation in March, 1945. The case was
declared reconstituted on May 10, 1947, and the evidence was presented on August 28 and September 30, 1947. On the same day
resolution was issued granting the petition.

Although appellant was represented at the hearing and cross-examined the witnesses for the petitioner, he did not file an opposition or
presented any evidence.

The lower court made the findings of fact in the following paragraphs of its resolution:

Eremes Kookooritchkin applies for Philippine citizenship naturalization under the provisions of Commonwealth Act 473, as
amended by Act 535.

The records shows that in August, 1941, he filed his petition for naturalization supported by the affidavits of ex-Judge Jaime M.
Reyes and Dr. Salvador Mariano, both residents of Camarines Sur. In the preceding year, in July, 1940 to be precise, he filed
his declaration of intention to become a citizen of this country. Notice of the hearing was published as required by law.

It was established at the hearing that the petitioner is a native-born Russian, having first seen the light of day on November 4,
1897 in the old City of St. Petersburg, Russia. He grew up as a citizen of the defunct Imperial Russian Government under the
Czars. World War I found him in the military service of this Government. In 1915 he volunteered for the Imperial Russian navy
and was sent to the Navy Aviation School. He fought with the Allies in the Baltic Sea, was later transferred to the eastern front
in Poland, and much later was sent as a navy flier to Asia Minor. In the latter part of the war, but before the Russian
capitulation, he was transferred to the British Air Force under which he served for fourteen months. When the revolution broke
out in Russia in 1917, he joined the White Russian Army at Vladivostok and fought against the Bolsheviks until 1922 when the
White Russian Army was overwhelmed by the Bolsheviks. As he refused to join the Bolshevik regime, he fled by sea from
Vladivostok to Shanghai and from this Chinese port he found his way to Manila, arriving at this port as a member of a group of
White Russians under Admiral Stark in March, 1923. He stayed in Manila for about seven months, then moved to Olongapo,
Zambales, where he resided for about a year, and from this place he went to Iriga, Camarines Sur, where he established his
permanent residence since May, 1925. He has remained a resident of this municipality, except for a brief period from 1942 to
July, 1945, when by reason of his underground activities he roamed mountains of Caramoan as a guerrilla officer. After
liberation he returned to Iriga where again he resides up to the present time.

The applicant is married to a Filipino by the name of Concepcion Segovia, with whom he has one son named Ronald
Kookooritchkin. He is at present studying in Saint Agnes Academy, at Legaspi, Albay, a school duly recognized by the
Government.

The applicant is shop superintendent of A. L. Ammen Transportation Company, with about eighty Filipino employees working
under him. He receives an annual salary of P13,200 with free quarters and house allowance. He also owns stocks and bonds
of this and other companies.

The applicant speaks and writes English and the Bicol dialect. Socially he intermingles with the Filipinos, attending parties,
dances and other social functions with his wife. He has a good moral character and believes in the principles underlying the
Philippine Constitution. He has never been accused of any crime. On the other hand, he has always conducted himself in a
proper and irreproachable manner during his entire period of residence in Camarines Sur, in his relations with the constituted
authorities as well as with the community.
 Although he could have lived in ease by maintaining good relations with the enemy by reason of his being Russian-born during
the years preceding the declaration of war by Russia against Japan, the applicant of his own volition chose to cast his lot with
the guerrilla movement and fought the enemy in several encounters in the Province of Camarines Sur. He belonged to the
guerrilla outfit of Colonel Padua with rank of major. Upon the arrival of the forces of liberation he was attached to the American
Army from April to June, 1945.

Although a Russian by birth he is not a citizen of Soviet Russia. He disclaims allegiance to the present Communist
Government of Russia. He is, therefore, a stateless refugee in this country, belonging to no State, much less to the present
Government of the land of his birth to which he is uncompromisingly opposed. He is not against organized government or
affiliated with any association which upholds and teaches doctrine opposing all organized governments. He does not believe in
the necessity or propriety of violence, personal assault or assassination for the success or predominance of his ideas. Neither
is he a polygamist or a believer in the practice of polygamy. He is not suffering from any mental alienation or incurable
contagious disease.

Appellant assigns four errors in the appealed resolution. We will consider them separately.

Appellant claims that the lower court erred in not finding that the declaration of intention to become a Filipino citizen filed by appellee is
invalid and insufficient as a basis for the petition of naturalization. The question calls for the application of the following provision of
section 5 of the Revised Naturalization Law:

No declaration shall be valid until entry for permanent residence has been established and a certificate showing the date,
place and manner of his arrival has been issued.

Appellant alleges that no documentary or testimonial evidence was introduced to establish the fact that appellee had lawfully been
admitted into the Philippines for permanent residence.

In the reconstituted declaration (page 11, record on appeal) the following can be read:

I arrived at the Port of Manila on or about the first day of March, 1923, as shown by the attached certificate of arrival or landing
certificate of residence.

The records of the Bureau of Justice, where the declarations of intention to become a Filipino citizen were filed, had been lost or
destroyed during the battle for the liberation of Manila, and the certificate alluded to has not been reconstituted.

Appellant's contention that attachment of the certificate of arrival is essential to the validity of a declaration finds no support in the
wordings of the law, as the above-quoted section 5 of Commonwealth Act no. 473 uses the words "has been issued.

Appellee suggests that we would not consider the question here raised by appellant, the latter having failed to raise it in lower court and
points out that there is testimonial evidence showing appellee's arrival March, 1923, and that he was lawfully admitted for permanent
residence, and the testimony of petitioner has not been refuted. Appellee's alleges that the office of the President has certified that it is
a matter of record that petitioner was one of the Russian refugees who entered the Philippines under the command of Admiral Stark,
the facts regarding arrival of the latter fleet being a matter of common knowledge, widely publicized in the newspapers at the time, of
which this Court may properly take judicial notice under section 5 of Rule 123. When the fleet entered the Philippine waters, it was met
by a Governor General Wood who, later, took the matter up with the authorities in Washington in lengthy correspondence, and the
1,200 persons manning the fleet were allowed to land and to remain in the Philippines or proceed to other countries, except about 800
who were allowed to go to the United States and given free transportation on the naval transport "Merritt." The ships of the fleet were
sold in the Philippines.

The undisputed fact that the petitioner has been continuously residing in the Philippines for about 25 years, without having been
molested by the authorities, who are presumed to have been regularly performing their duties and would have arrested petitioner if his
residence is illegal, as rightly contended by appellee, can be taken as evidence that he is enjoying permanent residence legally. That a
certificate of arrival has been issued is a fact that should be accepted upon the petitioner's undisputed statement in his declaration of
July, 1940, that the certificate cannot be supposed that the receiving official would have accepted the declaration without the certificate
mentioned therein as attached thereto.

We conclude that petitioner's declaration is valid under section 5 of the Naturalization Law, failure to reconstitute the certificate of arrival
notwithstanding. What an unreconstituted document intended to prove may be shown by other competent evidence.
 II

The second assignment of error touches upon two questions, that the lower court erred (1) in not finding that appellee has not
established a legal residence in the Philippines, and (2) in not finding that he cannot speak and write any of the principal Philippine
languages.

The first question has already been disposed of in the above discussion. Perusal of the testimonies on record leads to the conclusion
that petitioner has shown legal residence in the Philippines for a continuous period of not less than ten years as required by section 2 of
Commonwealth Act No. 473.

As to the next question, appellant alleges that in the oral test at the hearing, it was demonstrated that petitioner has only a smattering of
Bicol, the Filipino language that petitioner alleges to know, and he cannot speak it as he was not able to translate from English to Bicol
questions asked by the court and the provincial fiscal, although, in the continuation of the hearing on September 30, 1947, "surprisingly
enough, he succeeded answering correctly in Bicol the questions propounded by his counsel, however, he fumbled and failed to give
the translation of such a common word as 'love' which the fiscal asked of him.

The lower court made the finding of fact that applicant speaks and writes English and Bicol and there seems to be no question about
the competency of the judge who made the pronouncement, because he has shown by the appealed resolution and by his questions
propounded to appellee, that he has command of both English and Bicol.

The law has not set a specific standard of the principal Philippine languages. A great number of standards can be set. There are
experts in English who say that Shakespeare has used in his works 15,000 different English words, and the King's Bible about 10,000,
while about 5,000 are used by the better educated persons and about 3,000 by the average individual. While there may be persons
ambitious enough to have a command of the about 600,000 words recorded in the Webster's International Dictionary, there are
authorities who would reduce basic English to a few hundred words. Perhaps less than one hundred well selected words will be enough
for the ordinary purposes of daily life.

There is a reason to believe that the lower court's pronouncement is well taken considering the fact that, after he was liberated in 1942
from the Japanese in the Naga prison, petitioner joined the guerrilla in the Bicol region, took part in encounters and skirmishes against
the Japanese, and remained with the guerrilla until the Americans liberated the Bicol provinces. If appellee with his smattering of Bicol
was able to get along with his Bicol comrades in the hazardous life of the resistance movement, we believe that his knowledge of the
language satisfies the requirement of the law.

But appellant contends that there is no piece of positive evidence to support petitioner's allegation that he can write too in the Bicol
language. There, is, however, on record circumstantial evidence from which it can be concluded that petitioner ought to know also how
to write Bicol. We know that Bicol, as all the important Philippine languages, uses the same alphabet used in English, and it is much
easier to write Bicol than English, because it is phonetic. Vowels and consonants have in them single and not interchangeable phonetic
values, while English words deviate very often from the basic sounds of the alphabet. The ability to write cannot be denied to a person
like petitioner, who has undergone the exacting technical training to be able to render services as flier in the Russian Naval Squadron in
the Baltic Sea and in the British Air Forces during the first World War. The difference between the Cyrillic alphabet, as now used by
Russians, and our Roman alphabet, cannot weigh much to deny petitioner the ability to use the latter. A person who has shown the
command of English which can be seen in his testimony on record can easily make use of an alphabet of twenty or more letters
universally used in this country where he has been residing continuously for 25 years.

III

Appellant contends that the lower court erred in finding appellee stateless and not a Russian citizen and in not finding that he has failed
to establish that he is not disqualified for Philippine citizenship under section 4 (h) of the Revised Naturalization Law.

It is contended that petitioner failed to show that under the laws of Russia, appellee has lost his Russian citizenship and failed to show
that Russia grants to Filipinos the right to become a naturalized citizens or subjects thereof. The controversy centers on the question as
to whether petitioner is a Russian citizen or is stateless.

Petitioner testified categorically that he is not a Russian citizen and that he has no citizenship. His testimony supports the lower court's
pronouncement that petitioner is a stateless refugee in this country.

Appellant points out that petitioner stated in his petition for naturalization that he is citizen or subject of the Empire of Russia, but the
Empire of Russia has ceased to exist since the Czars were overthrown in 1917 by the Bolshevists, and the petitioner disclaims
allegiance or connection with the Soviet Government established after the overthrow of the Czarist Government.

We do not believe that the lower court erred in pronouncing appellee stateless. Appellee's testimony, besides being uncontradicted, is
supported by the well-known fact that the ruthlessness of modern dictatorship has scattered throughout the world a large number of
stateless refugees or displaced persons, without country and without flag. The tyrannical intolerance of said dictatorships toward all
opposition induced them to resort to beastly oppression, concentration camps and blood purges, and it is only natural that the not-so-
fortunate ones who were able to escape to foreign countries should feel the loss of all bonds of attachment to the hells which were
formerly their fatherland's. Petitioner belongs to that group of stateless refugees.

Knowing, as all cultured persons all over the world ought to know, the history, nature and character of the Soviet dictatorship, presently
the greatest menace to humanity and civilization, it would be technically fastidious to require further evidence of petitioner's claim that
he is stateless than his testimony that he owes no allegiance to the Russian Communist Government and, is because he has been at
war with it, he fled from Russia to permanently reside in the Philippines. After finding in this country economic security in a remunerative
job, establishing a family by marrying a Filipina with whom he has a son, and enjoying for 25 years the freedoms and blessings of our
democratic way of life, and after showing his resolution to retain the happiness he found in our political system to the extent of refusing
to claim Russian citizenship even to secure his release from the Japanese and of casting his lot with that of our people by joining the
fortunes and misfortunes of our guerrillas, it would be beyond comprehension to support that the petitioner could feel any bond of
attachment to the Soviet dictatorship.

IV

The fourth and last assignment of error need not be discussed, it being only a sequel of the other assignments and has necessarily
been disposed of in their discussion.

The appealed resolution is affirmed.

Paras, Feria, Pablo, Bengzon, Briones, Padilla and Tuason, JJ., concur.
 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-129 December 19, 1945

TOMOYUKI YAMASHITA, petitioner,

vs.
WILHELM D. STYER, Commanding General, United States Army Forces, Western Pacific, respondent.

Col. Harry E. Clarke and Lt. Col. Walter C. Hendrix for petitioner.
Maj. Robert M. Kerr for respondent.
Delgado, Dizon, Flores and Rodrigo appeared as amici curiae.

MORAN, C.J.:

Tomoyuki Yamashita, erstwhile commanding general of the 14th army group of the Japanese Imperial Army in the Philippines, and now
charged before an American Military Commission with the most monstrous crimes ever committed against the American and Filipino
peoples, comes to this Court with a petition for habeas corpus and prohibition against Lt. Gen. Wilhelm D. Styer, Commanding General
of the United States Army Forces, Western Pacific. It is alleged therein that petitioner after his surrender became a prisoner of war of
the United States of America but was later removed from such status and placed in confinement as an accused war criminal charged
before an American Military Commission constituted by respondent Lieutenant General Styer; and he now asks that he be reinstated to
his former status as prisoner of war, and that the Military Commission be prohibited from further trying him, upon the following grounds:

(1) That the Military Commission was not duly constituted, and, therefore, it is without jurisdiction;

(2) That the Philippines cannot be considered as an occupied territory, and the Military Commission cannot exercise jurisdiction therein;

(3) That Spain, the "protecting power" of Japan, has not been given notice of the implementing trial against petitioner, contrary to the
provisions of the Geneva Convention of July 27, 1892, and therefore, the Military Commission has no jurisdiction to try the petitioner;

(4) That there is against the petitioner no charge of an offense against the laws of war; and

(5) That the rules of procedure and evidence under which the Military Commission purports to be acting denied the petitioner a fair trial.

We believe and so hold that the petition for habeas corpus is untenable. It seeks no discharge of petitioner from confinement but merely
his restoration to his former status as a prisoner of war, to be interned, not confined. The relative difference as to the degree of
confinement in such cases is a matter of military measure, disciplinary in character, beyond the jurisdiction of civil courts.

Neither may the petition for prohibition prosper against Lt. Gen. Wilhelm D. Styer. The military Commission is not made party
respondent in this case, and although it may be acting, as alleged, without jurisdiction, no order may be issued in these case
proceedings requiring it to refrain from trying the petitioner.

Furthermore, this Court has no jurisdiction to entertain the petition even if the commission be joined as respondent. As we have said
in Raquiza vs. Bradford (pp. 50, 61, ante), ". . . an attempt of our civil courts to exercise jurisdiction over the United States Army before
such period (state of war) expires, would be considered as a violation of this country's faith, which this Court should not be the last to
keep and uphold." (Emphasis supplied) We have said this in a case where Filipino citizens were under confinement, and we can say no
less in a case where the person confined is an enemy charged with the most heinous atrocities committed against the American and
Filipino peoples.

True that the rule was made applicable in time of war, and there is a conflict of opinion as to whether war has already terminated. War
is not ended simply because hostilities have ceased. After cessation of armed hostilities, incident of war may remain pending which
should be disposed of as in time of war. "An important incident to a conduct of a war is the adoption of measure by the military
command not only to repel and defeat the enemies but to seize and subject to disciplinary measures those enemies who in their
attempt to thwart or impede our military effort to have violated the law of the war." (Ex parte Quirin, 317 US., 1; 63 Sup. Ct., 2.) Indeed,
the power to create a Military Commission for the trial and punishment of war criminals is an aspect of waging war. And, in the
language of a writer, a Military Commission "has jurisdiction so long as a technical state of war continues. This includes the period of an
armistice, or military occupation, up to the effective date of a treaty agreement." (Cowles, Trial of War Criminals by Military Tribunals,
American Bar Association Journal, June, 1944.)
Upon the other hand, we have once said (Payomo vs. Floyd, 42 Phil., 788), — and this applicable in time of war as well as the time of
peace — that this Court has no power to review upon habeas corpus the proceedings of a military or naval tribunal, an that, in such
case, "the single inquiry, the test, is jurisdiction. That being established, the habeas corpus must be denied and the petitioner
discharged." (In re Grimley, 137 U.S., 147; 11 Sup. Ct., 54; 34 La. ed., 636.) Following this rule in the instant case, we find that the
Military Commission has been validly constituted and it has jurisdiction both over the person of the petitioner and over the offenses with
which he is charged.

The Commission has been validly constituted by Lieutenant General Styer duly issued by General Douglas MacArthur, Commander in
Chief, United States Army Force Pacific, in accordance in authority vested in him and with radio communication from the Joint Chiefs of
Staff, as shown by Exhibits C, E, G, and H, attached by petition. Under paragraph 356 of the Rules of the Land Welfare a Military
Commission for the trial and punishment of the war criminals must be designated by the belligerent. And the belligerent's representative
in the present case is none other than the Commander in Chief of the United States Army in the Pacific. According to the Regulations
Governing the Trial of the War Criminals in the Pacific, attached as Exhibit F to the petition, the "trial of persons, units and organizations
accused as a war criminals will be the Military Commissions to be convened by or under the authority of the Commander in Chief,
United States Army Forces, Pacific." Articles of War Nos. 12 and 15 recognized the "Military Commission" appointed by military
command as an appropriate tribunal for the trial and punishment of offenses against the law of the war not ordinarily tried by court
martial. (Ex parte Quirin, supra.) And this has always been the United States military practice at since the Mexican War of 1847 when
General Winfield Scott took the position that, under the laws of war, a military commander has an implied power to appoint and
convene a Military Commission. This is upon the theory that since the power to create a Military Commission is an aspect of waging
war, Military Commanders have that power unless expressly withdrawn from them.

The Military Commission thus duly constituted has jurisdiction both over the person of the petitioner and over the offenses with which
he is charged. It has jurisdiction over the person of the petitioner by reason of his having fallen into the hands of the United States Army
Forces. Under paragraph 347 of the Rules of the Land Warfare, "the commanders ordering the commission of such acts, or under
whose authority they are committed by their troops, may be punished by the belligerent into whose hands they may fall."

As to the jurisdiction of the Military Commission over war crimes, the Supreme Court of the United States said:

From the very beginning of its history this Court has recognized and applied the law of war as including that part of the law of
nations which prescribes, for the conduct of war, the status rights and duties and of enemy nations as well as of enemy
individuals. By the Articles of War, and especially Article 15, Congress has explicitly provided, so far as it may constitutionally
do so, that military tribunals shall have jurisdiction to try offenders or offenses against the law of war in appropriate cases.
Congress, in addition to making rules for the government of our Armed Forces, has thus exercised its authority to define and
punish offenses against the law of nations by sanctioning, within constitutional limitations, the jurisdiction of military
commissions to try persons and offenses which, according to the rules and precepts of the law of nations, and more
particularly the law of war, are cognizable by such tribunals. (Ex parte Quirin, 317 U.S. 1, 27-28; 63 Sup. Ct., 2.)

Petitioner is charged before the Military Commission sitting at Manila with having permitted members of his command "to commit brutal
atrocities and other high crimes against the people of the United States and of its allies and dependencies, particularly the Philippines,"
crimes and atrocities which in the bills of particulars, are described as massacre and extermination of thousand and thousands of
unarmed noncombatant civilians by cruel and brutal means, including bayoneting of children and raping of young girls, as well as
devastation and destruction of public, or private, and religious property for no other motive than pillage and hatred. These are offenses
against the laws of the war as described in paragraph 347 of the Rules of Land Warfare.

It is maintained, however, that, according to the Regulations Governing the Trial of War Criminals in the Pacific. "the Military
Commission . . . shall have jurisdiction over all of Japan and other areas occupied by the armed forces commanded by the Commander
in Chief, United States Army Forces, Pacific" (emphasis supplied), and the Philippines is not an occupied territory. The American
Forces have occupied the Philippines for the purpose of liberating the Filipino people from the shackles of Japanese tyranny, and the
creation of a Military Commission for the trial and punishment of Japanese war criminals is an incident of such war of liberation.

It is maintained that Spain, the "protecting power" of Japan, has not been given notice before trial was begun against petitioner,
contrary to the provisions of the Geneva Convention of July 27, 1929. But there is nothing in that Convention showing that notice is a
prerequisite to the jurisdiction of Military Commissions appointed by victorious belligerent. Upon the other hand, the unconditional
surrender of Japan and her acceptance of the terms of the Potsdam Ultimatum are a clear waiver of such a notice. It may be stated,
furthermore, that Spain has severed her diplomatic relation of Japan because of atrocities committed by the Japanese troops against
Spaniards in the Philippines. Apparently, therefore, Spain has ceased to be the protecting power of Japan.

And, lastly, it is alleged that the rules of procedure and evidence being followed by the Military Commission in the admission of
allegedly immaterial or hearsay evidence, cannot divest the commission of its jurisdiction and cannot be reviewed in a petition for
the habeas corpus. (25 Am. Jur., 218; Collins vs. McDonald, 258 U. S. 416; 66 Law. ed., 692; 42 Sup. Ct., 326).

For all foregoing, petition is hereby dismissed without costs.lawphi1.net

Jaranilla, Feria, De Joya, Pablo, Hilado, Bengzon, and Briones, JJ., concur.
Paras, J., concurs in the result.
Separate Opinions

OZAETA, J., concurring and dissenting:

I concur in the dismissal of the petition for habeas corpus and prohibition on the ground that the Military Commission trying the
petitioner has been legally constituted, and that such tribunal has jurisdiction to try and punish the petitioner for offenses against the law
of war. (Ex parte Quirin, 317 U.S. 1; 63 Sup. Ct., 2.)

I dissent, however, from the portion of the opinion of the Court which cities and applies herein its decision in the case Raquiza vs.
Bradford (pp. 50, 61, ante ), to the effect that an attempt of our civil court to exercise jurisdiction over the United States Army would
considered as a violation of this country's faith. The decision of Raquiza case, from which I dissented, was based mainly of the case of
Coleman vs. Tennessee (97 U. S., 509), in which was mentioned merely by way of argument the rule of international law to effect that a
foreign army, permitted to march through a friendly country to be stationed in it, by permission of its government or sovereign, is exempt
from the civil and criminal jurisdiction of the place. After reviewing the facts and the ruling of the court in the Coleman case, I said in my
dissenting opinion in the Raquiza case the following:

. . . Thus it is clear that the rule of international law above mentioned formed no part of the holding of the court in the said
case.

Neither can such rule of international law of itself be applicable to the relation between the Philippines and the United States,
for the reason that the former is still under the sovereign of the latter. The United States Army is not foreign to the Philippines.
It is here not by permission or invitation of the Philippine Government but by right of sovereignty of the United States over the
Philippines. It has the same right to be here as it has to be in Hawaii or California. The United States has the same obligation
to defend and protect the Philippines, as it has to defend and protect Hawaii or California, from foreign invasion. The citizens
of the Philippines owe the same allegiance to the United States of the America as the citizens of any territory or States of the
Union.

That the case of Coleman vs. Tennessee was erroneously invoked and applied by this Court in the case of Raquiza vs. Bradford, was
admitted by Mr. Wolfson, the attorney for Lieutenant Colonel Bradford, who, notwithstanding the judgment in favor of his client, moved
this Court to modify the majority opinion "by eliminating all reference to the case of Coleman vs. Tennessee (97 U.S. 509). because, as
well pointed out in both dissenting opinions, said case has no application whatever to the case at bar." .

The rule of international law mentioned in the Coleman case and erroneously applied by analogy in the Raquiza case, has likewise no
application whatever to the case at bar. A mistake when repeated only becomes a blunder.

PERFECTO, J., concurring and dissenting:

1. FACTS IN THIS CASE

Petitioner prays that a writ of habeas corpus be issued directed to respondent Lt. Gen. Wilhelm D. Styer, Commanding General, United
Army Forces, Western Pacific, commanding him to produce the body of the petitioner before this Court and that "he be ordered
returned to the status of an internee as a prisoner of war in conformity with the provision of article 9 of the Geneva Convention of July
27, 1929, relative to the treatment of prisoners of war and of paragraph 82 of the Rules of Land Warfare, F. M. 27-10, United States
War Department, and that a writ of prohibition be issued by this Court prohibiting the respondent from proceeding with the trial, and that
the petitioner be discharged from the offenses and confinement aforesaid."

Prior to September 3, 1945, petitioner was the commanding general of the 14th Army Group of the Imperial Japanese Army in the
Philippines. On said date, he surrendered to the United States and was interned in New Bilibid Prison, in Muntinlupa, in conformity with
the provision of article 9 of the Geneva Convention of July 27, 1929, relative to the treatment of prisoners of war, and of paragraph 82
of the Rules of Land Warfare of the United States War Department.

On October 2, 1945, respondent caused to be served on petitioner a charge for violation of the laws of war, signed by Colonel Alva C.
Carpenter, wherein it is alleged that between 9 October, 1944, and 2 September, 1945, petitioner "while commander of the armed
forces of Japan at war with the United States and its allies, unlawfully disregarded and failed it discharge his duty as commander to
control the operations of the members of his command, permitting them to commit brutal atrocities and other high crimes against the
people of the United States and its allies and dependencies, particularly the Philippines." Thereafter petitioner was removed from the
status of the prisoner of war and was placed in confinement as an accused war criminal and is presently confined in the custody of
respondent at the residence of the United States High Commissioner of the Philippines in Manila.

On October 1, 1945, by command of respondent and pursuant to authority contained in a letter from the General Headquarters, United
States Army Force, Western Pacific, dated September 24, 1945, a Military Commission was appointed to try petitioner. At the same
time several officers were designated to conduct the prosecution and several others to act as defense counsel.
The commission was instructed to follow the provisions of the letter of September 24, 1945, and was empowered to "make such rules
for the conduct of the proceedings as it shall deem necessary for a full and fair trial of the person before it. Such evidence shall be
admitted as would, in the opinion of the president of the commission, have probative value to a reasonable man and is relevant and
material to the charges before the commission. The concurrence of at least two-thirds of the members of the commission present shall
be necessary for a conviction or sentence."

Said letter (Exhibit G) addressed to respondent by Brigadier General B. M. Fitch, "by command of General MacArthur," empowers
respondent "to appoint Military Commissions for the trial of such persons accused of war crimes as may hereafter be designated by this
Headquarters," with the instructions that "all the records of trial including judgment or sentence and the action of the appointing
authority will be forwarded to this Headquarters. Unless otherwise directed, the execution of judgment or sentence in all cases will be
withheld pending the action of the Commander in Chief.

On the same date "by Command of General MacArthur" (Exhibit H), respondent was instructed to proceed immediately with the trial of
General Tomoyuki Yamashita for the charge served on petitioner on October 2, 1945 (Exhibit B).

Upon arraignment on October 8, 1945, by the above mentioned Military Commission, petitioner entered a plea of not guilty. On the
same date the prosecution filed a bill of particulars (Exhibit 1) with 64 items of crimes, and on October 29, 1945, a supplemental bill of
particulars (Exhibit J) with many other additional items, adding up to 123, of the specified crimes imputed to petitioner.

On October 19, 1945, petitioner's defense filed a motion to dismiss the case before the Military Commission for the reasons that the
charge, as supplemented by the bills of particulars, "fails to state a violation of the laws of war by the accused, and that the commission
has no jurisdiction to try this cause." The motion was denied on October 29.

On said day, which was the first day of trial, the prosecution offered in evidence an affidavit of Naukata Utsunomia (Exhibit M) executed
on October 1, 1945, and subscribed and sworn to before Captain Jerome Richard on October 22, 1945. The affidavit was made in
Japanese through interpreter Tadashi Yabi. The defense objected to the admission of said affidavit, invoking to said effect article 25 of
the Articles of War prohibiting the introduction of depositions by the prosecution in a capital case in proceedings before a court martial
or a Military Commission. (Exhibit L and N.)

Again on the same first day of trial, hearsay evidence was offered, defense counsel objected, but the objection was again overruled.
(Exhibits O and P.) The defense counsel alleged then that the admission of hearsay evidence was violative of Article of War 38, the
manual for the court-martial, and the rules of evidence in criminal cases in the district courts of the United States. It is alleged by
petitioner that violations of legal rules of evidence have continued and are continuing during the trial.

At the opening of the trial, "the prosecution stated that no notice of impending trial had been given the protecting power of the Japan by
the United States," such notice being required by article 60 of the Geneva Convention of July 27, 1929, and of paragraph 133 of the
Rules of Land Warfare, United States War Department.

2. REMEDIES PRAYED FOR

After alleging the above-mentioned facts, petitioner maintains that his confinement and trial as a war criminal are illegal and in violation
of articles 1 and 3 of the Constitution of the United States and the Fifth Amendment thereto, and a certain other portions of said
Constitution, and laws of the United States, and article 3 of the Constitution of the Philippines and certain other portions of said
Constitution and laws of the Philippines Islands, and of certain provisions of the Geneva Convention of July 27, 1929, in that:

(a) There being no martial law, no Military Government of occupied territory and no active hostilities in the Philippines at the time of the
appoint the same, the commission is without jurisdiction.

(b) There being no charge of an offense against the laws of war by the petitioner, the commission is without jurisdiction.

(c) The rules of procedure and evidence under which the Military Commission purports to be acting deny the petitioner the fair trial
guaranteed by the Constitution of the United States and the Constitution of the Philippines, and are in violation of Articles of War 25 and
38 and of other provisions of the laws of the United States and of the Philippines.

(d) The respondent was granted to authority by the Commander in Chief, United States Army Forces, Western Pacific, to appoint a
military commission and /or to try the petitioner in the Philippine Islands, and the Commission is, therefore, without jurisdiction to try this
case.

(e) The United, States, not having given notice of the impending trial to the protecting power of Japan as made mandatory by the
Geneva Convention of July 27, 1929, relative to the treatment of prisoners of war, cannot properly and illegally try the petitioner on the
charge.
 3. RULES OF INTERNATIONAL LAW

In the Rules of Land Warfare, paragraph 133 (Exhibit Q), it is provided that "at the opening of a judicial proceeding directed against a
prisoner of war the detaining power shall advise the representative of the protecting power thereof as soon as possible, and always
before the date set for the opening of the trial," and "at all events, at least three weeks before the opening of the trial."

Article VIII of the Convention respecting the laws and customs of war on land, agreed in The Hague on July 29, 1899, provides:
"Prisoners of war shall be subject to the laws, regulations, and orders in force in the army of the State into whose hands they have
fallen.

Section 59 of General Orders No. 100, dated April 24, 1863, containing instructions for the government of armies of the United States in
the field provides: "A prisoner of war remains answerable for his crimes committed against captor's army or people, committed before
he was captured, and for which he has not been punished by his own authorities."

Secretary of State Daniel Webster, in a communication addressed to Mr. Thompson, Minister to Mexico, on April 5, 1842, said: "The
law of the war forbids the wounding, killing, impressment into the troops of the country or the enslaving or otherwise maltreating of
prisoners of war, unless they have been guilty of some grave crime; and from the obligation of this law no civilized state can discharged
itself."

4. IN ANCIENT GREECE AND ROME

Many of the basic ideas which prevail today in the customs and usages of nations and became part of the international law emerged
from the human mind centuries before the Christian Era. Such is the idea that prisoners of war are entitled to humane treatment, that
treasons of war should be discountenanced, and that belligerents must abstain from causing harm to non-combatants.

On his return to Peloponnesus in 427 B. C., Alcibiades touched at Mayonnesus and there slew most of the captives taken on his
voyage. According to Thucydides, the Samian exiles remonstrated with him for putting to the death prisoners who have not been in
open hostilities against him.

The same historian narrates that the year before, the Mytileneans of Lesbos revolted from Athens, but they were obliged to capitulate in
the following year to Paches, who dispatched to Athens over a thousand prisoners. Their disposal provoked discussion in the Athenian
assembly. At the instigation of Cleon, the demagogue and the former opponent of Pericles, an order was issued to slaughter not only
the men who arrived in Athens, but the entire made population of Mytilene that was of military age, and to enslave the women and
children. The execution of the order was delayed, and another assembly was called. There an amendment of Theodotus was carried,
and the previous order countermanded.

The roman treatment of prisoners was less rigorous than the Greek. As stated by Virgilius, "the Roman policy from the first was, on the
one hand, debellare super bos, to subdue the proud and arrogant peoples and, on the other,parcellare subiectes, to spare those who
have submitted."

"Dionisius states that a rule existed in Rome as early as the time of Romulus, which prohibited the putting to death or enslaving on men
captured in the conquered cities, and also the devastation of their territories; it provided, on the contrary, for the sending of inhabitants,
either to take possession by lot of the some part of the country, for making the conquered cities Roman colonies, and even for
conceding to them some of the privileges Roman citizenship." (Philipps on the International Law and Custom of Ancient Greece and
Rome, Vol. II, p. 254.)

In 407 B.C. the Spartan commander Callicraditas took the town of Methymna by storm. In spite of the persuasion of his allies, according
to Xenophon, he refused to the sell the Athenian garrison and Methymnaean citizens as slaves, declaring that so long as he exercises
the command no Greek should ever be reduced to slavery. Grote in his History of Greece could not refrain from praising this gesture of
the Macedonian admiral by saying: "No one who has familiarized himself with the details of Greecian warfare can feel the full grandeur
and sublimity of this proceeding . . . It is not merely that the prisoners were spared and set free . . . It is that this particular act of
generosity was performed in the name and for the recommendation of Pan-Hellenic brotherhood and Pan-Hellenic independence for
the foreigner . . . It is, lastly, that the step was taken in resistance to the formal requisition on the part of his allies." (History of Greece,
Vol. VI p. 387.)

Philip, the Macedonian King, liberated Athenian prisoners without ransom after the taking of Olynthus in 348 B.C. and ten years later
after the Battle of Chaeronee, he dismissed the prisoners with all their baggage.

Xenophon quotes Agesileus reminding his soldiers that "prisoners were meant to be kept, and not criminals to be punished." And
Pausanias narrates that when Epaminondas, the greatest Theban general, had gathered together, he nominally assigned to each of the
men he captured there a different nationality, and set them all free, and there are cases where captives were dismissed on parole to
have chance of finding ransomers.
Among the Greeks much was done to humanize warfare, and to remove from it the atrocities which prevailed amongst the most of the
nations antiquity. The Oracle of Delfi refused to listen to the Milesians as they had not duly expiated the excesses committed in their
civil wars, though it responded to all, others, even to barbarians, who consulted it. "C'etait comme l'excommunication du paganisme",
comments Leurent (Vol. II, p. 135).

Poets, philosophers, artist, and men of intellectual distinction in general, even though they became invested with enemy character on
the outbreak of war, were honored and respected. In 335 B.C. Alexander the Great destroyed Thebes, but he left Pindar's house
uninjured and honored the poet's descendants. In ancient Hellas was already known the practice of neutralizing cities and protecting
them from the ravages of war. Temples, priest, and embassies were considered inviolable. The right sanctuary was universally
recognized. Mercy was shown to suppliant and helpless captives. Safe-conducts were granted and respected. Burial of dead was
permitted, and graves were unmolested. It was considered wrong to cut off or poison the enemy's water supply, or to make use of
poisonous weapons. Treacherous strategems of whatever description were condemned as being contrary to civilized warfare. Poets
and philosophers, orators and historians proclaimed humane doctrines. Plato constructed his ideal republic on the basis of what he
conceived to be perfect justice. Aristotle condemned the principle of retaliation as being antagonistic to true justice. Euripides speaks of
excesses in war not only as acts of intrinsic wickedness and transgression against universal law, but, indeed, as a suicidal folly on the
part of the offender. In one of his dramas he makes Poseidon declare: "But foolish is the mortal who lays waste cities, temple, and
tombs, the sanctuaries of the dead; for having consigned them to solitude, he is the one himself to perish afterwards."

The mild and clement nature shown by Caesar to many belligerent peoples was recognized even by his political enemy Cicero to whom
he wrote: You are not mistaken about me . . . . Nothing is far from my nature than cruelty . . . . I am told that some prisoners I set free
seize the first opportunity to take up arms against me; nevertheless, I shall not renounce my policy."

The Roman conduct Roman conduct far transcended in its civilized and humane character that of the German leader Arminius, who is
reported by Tacitus to have burned to death and otherwise barbarously slain the centurions and tribunes of the Varian legions, and
nailed the skulls to trees. The sanction of Roman jurisprudence and the submission to the fundamental principles of justice proved
effective.

Livy narrates that in 393 B.C. a certain school master of Falerii, who was in charge of the sons of the principal citizens of the town, took
the opportunity to lead them to the Roman camp and threw them into the power of the enemy. The roman general Camillus, indignant
at this treason, ordered the boys to drive their master back to the town, and flog him all the way. There were, he pointed, laws of war as
well as of peace, and the Romans had learn to put them into practice not less justly than bravely — "sunt et belli, sicut pacis, iura;
iusteque, ea, non, minus, quam fortiter, didicimus gerere."

When Adgantestrius made an offer to the Romans Senate to poison Arminius, according to Tacitus, he was at once informed that it was
not by secret treachery but openly by arms that the Romans proceeded against their enemies. The same historian mentioned the fact
that the Romans generals rejected the scheme, suggested by the King's physician, of poisoning Pyrrhus (280 B.C.) and even delivered
up the traitor, Pyrrhus, in return for the Roman generosity, allowed his prisoners to go to Rome on parole in order to celebrate the
Saturnalia; after which, they, faithfully returned.

5. UNQUENCHABLE THIRSTINESS OF PERFECTION. — PETITIONER ENTITLED TO LEGAL GUARANTEES

Impelled by irrepressible endeavors aimed towards the ideal, by the unconquerable natural urge for improvement, by the unquechable
thirstiness of perfection in all orders of life, humanity has been struggling during the last two dozen centuries to develop an international
law which could answer more and more faithfully the demands of right and justice as expressed in principles which, weakly enunciated
at first in the rudimentary juristic sense of peoples of antiquity, by the inherent power of their universal appeal to human conscience, at
last, were accepted, recognized, and consecrated by all the civilized nations of the world.

Under these principles, petitioner General Tomoyuki Yamashita is entitled to be accorded all the guarantees, protections, and defenses
that all prisoners should have according to the customs and usages, convention and treaties, judicial decisions and executive
pronouncements, and generally accepted opinions of thinkers, legal philosophers and other expounders of just rules and principles of
international law. The seriousness or unfathomable gravity of a charges against him, the unthinkable magnitude of the wholesale
murders, rapes, and destructions for which he is called to answer, the beastly massacres and horrors by which he was thrown from the
pedestal of military glory as the "Tiger of Malaya" into the bottom of perversity of a human monster, must not be taken into
consideration, must all be forgotten, in order that true justice may be administered in this case.

6. WAR CRIMINALS

P ALIGN="JUSTIFY">"There is very little limitation on what a victorious nation can do with a vanquished State at the close of a war.
One shudders to think what Germany and Japan would do if they were the victors! But the common law of nations probably requires a
fair trial of offenders against war law as a prerequisite to punishment for alleged offenses; and that Geneva Convention so prescribed in
the case of prisoners of war. But in the final analysis a decent respect for the opinion of mankind and the judgment of history is, in
effect, a victorious belligerent's main limitation on its treatment of the surrendered at the close of a war; and this is self-imposed. The
United Nations are solemnly committed to the vindication and the rule of law which has been ruthlessly destroyed by the Nazis and
Japanese." (Sheldon Glueck, War Criminals, p. 77.).
"Formalized vengeance can bring only ephemeral satisfaction, with every probability of ultimate regret; but vindication of law through
legal process may contribute substantially to the re-establishment of order and decency in international relations." (Report of the
Subcommittee on the Trial and Punishment of War Crimes, 37 Am. J. Int. L. [1943], 663, 666.)

"Centuries of civilization stretched between the summary slaying of the defeated in a war, and the employment of familiar process and
protections of justice according to law to air the extent and nature of individual guilt . . . and in the civilized administration of justice,
even the most loathsome criminal caught redhanded must be given his day in court and an opportunity to interpose such defenses as
he may have." (Sheldon Glueck, Id., p. 78.)

7. ALLIED PRONOUNCEMENTS

According to a number of official pronouncements by United Nations' statesmen, the vast majority of offenders will be tried in the
domestic criminal or military tribunals of the injured nations. Thus on August 21, 1942, President Roosevelt, in condemning the crimes
committed against the civil population in occupied lands, solemnly announced that "the time will come when the criminals will have
stand in courts of law in the very countries which they are now oppressing, and to answer for their acts."

On September 8, 1942, Mr. Churchill promised that "those who are guilty of the Nazi crimes will have to stand up before tribunals in
every land where the atrocities have been committed."

The Moscow Declaration of November 1, 1943, sternly warned that: "at the time of granting of any armistice to any government which
may set up in Germany, those German officers or men and members of the Nazi party, who have been responsible for or have taken a
part (in the various) atrocities, massacres and executions will be sent back to the countries in which their abominable deeds according
to the laws of these liberated countries and of the free governments which will be erected therein," and that "the Allied Powers will
pursue them to the utmost ends of the earth and will deliver them to the accusers in order that justice may be done."

The American members of commission on responsibilities appointed at the close of World War I, had strenuously opposed the trial of
German war criminals in an international high tribunal on the grounds that it was unprecedented and that there existed no international
statute or convention making violations of the laws and customs of warfare international statute or convention making violations of the
laws and customs of warfare international crimes defining such offenses more specifically than the definitions to be found in the
prohibitions of the unwritten or written law of nations affixing a specific punishment to each crime, and giving jurisdiction to a world
court.

But Doctor Glueck is of opinion that "If the Germans were to try an American soldier for violating German statutes implementing the
laws and custom of warfare in a newly established type of military tribunal, the accused would not be heard to complain that he had
been set up Provided the international tribunal affords as adequate a trial as the accused would have had in the court of any injured
belligerent he has no valid ground for complaint."(P. 116.).

"One of the arguments — he continues — advanced by the American participants on the commission on responsibility at the close of
World War I, against the establishment of an international criminal tribunal was that it was unprecedented. The atrocities committed by
Axis powers led by Germany, even by comparison with their behavior in World War I, are unprecedented. Can history show a better
age than our own to initiate a series of much-needed precedents? Few symbols of this new era which heralds the neighborly
cooperation of civilized people in the vindication of the laws of civilized nation would be more impressive than an international criminal
court, in which the plaintiff would be the world community. . . . The international criminal court would be a more vivid symbol of the reign
of justice of an international plane than even the permanent court at The Hague has been. In domestic polity, the administration of
criminal justice of the strongest pillar of government. The doing of an international plane under international auspices is even more
important. It is indispensable to the survival, in the intercourse of nations, of the very traditions of law and justice. The besmirching of
the prestige of international law is not the least of the evils perpetrated by the Axis power led by Nazi Germany. The peerless and
efficient administration of justice in the case of Axis war criminals is today indispensable as a token to the peoples of the world, a sign
that crimes committed by one country's subject against the people of another member of the family of nations will be relentlessly
punished even though they run into huge numbers, were committed by men in uniform, and are instigated by a Fuehrer endowed by
himself and his intoxicated followers with the attributes of a demigod." (Page 178.)

"Adequate law for use by an international court now exist; and its enforcement by such a tribunal would violate no fundamental tenets of
civilized nations. The law for an international tribunal can be drawn from the rich reserviors of common and conventional law of nations
and the principles, doctrines and standards of criminal law that constitute the common denominator of all civilized penal codes.

"The punishment to be applied by domestic military and civil courts depend upon local law and practice. Those to be imposed by the
international tribunal could be based either upon the punishments permitted by the laws and customs or warfare or upon those provided
for crimes of similar nature and gravity by the law of the accusing State, taking into account, also, where necessary individual instances,
the law of the defendants States." (Page 181.)
 8. NO SURPRISES TO PETITIONER

Petitioner in this case cannot allege ignorance of the fact that the criminal acts alleged in the specified charges against him are
punishable by law, not only in all civilized nations, but in his own country.

Since January 1, 1882, the Japanese Government had been enforcing a Criminal Code based on the Code of Napoleon of 1811,
prepared by the French jurist M. Boissonade, said criminal code having been superseded by a new one on October 1, 1908.

Under the last, arson may be punished with death (article 108); rape is heavily punished (articles 176, 177 and 178); and murder or
homicide may be punished with death or penal servitude for life (article 109). These offenses and many others, punished by our Penal
Code, are known to the Japanese as crimes, which in Japanese is tsumi.

From the Lauterpacht edition (1944) of Oppenheim's International Law, Vol. II, pp. 450-458, we quote:

SEC. 251. In contradistinction to hostile acts of soldiers by which the latter do not lose their privilege of being treated as lawful
members of armed forces, war crimes are such hostile or other acts of soldiers or other individuals as may be punished by the
enemy on capture of the offenders. They include acts contrary to International Law perpetrated in violation of the law of the
criminal's own State, such as killing or plunder for satisfying private lust and gain, as well as criminal acts contrary to the laws
of war committed by order and on behalf of the enemy State. To that extent the notion of war crimes is based on the view that
States and their organs are subject to criminal responsibility under International Law.

SEC. 253. The fact that a rule of warfare has been violated in pursuance of an order of the belligerent Government or of an
individual belligerent commander does not deprive the act in question of its character as a war crime; neither does it, in
principle, confer upon the perpetrator immunity from punishment by the injured belligerent. A different view has occasionally
been adopted in military manuals and by writers, but it is difficult to regard it as expressing a sound legal principle.
Undoubtedly, a Court confronted with the plea of superior orders adduced in justification of a war crime is bound to take into
consideration the fact that obedience to military orders, not obviously unlawful, is the duty of every member of the armed
forces and that the latter cannot, in conditions of war discipline, be expected to weigh scrupulously the legal merits of the order
received; that rules of warfare are often controversial; and that an act otherwise amounting to a war crime may have been
executed in obedience to orders conceived as a measure of reprisals. Such circumstances are probably in themselves
sufficient to divest the act of the stigma of a crime. Also, the political authorities of the belligerent will frequently incline to take
into consideration the danger of reprisals against their own nation which are likely to follow as a measure of retaliation for
punishment of war crime durante bello. However, subject to these qualifications, the question is governed by the major
principles that members of the armed forces are bound to obey lawful orders only and that they cannot therefore escape
liability if, in obedience to a command, they commit acts both violate unchallenged rules of warfare and outrage the general
sentiment of humanity. To limit liability to the person responsible for the order may frequently amount, in practice, to
concentrating responsibility on the head of the State whose accountability, from the point of view of both international and
constitutional law, is controversial.

SEC. 257. All war crimes may be punished with death, but belligerents may, of course, inflict a more lenient punishment, or
commute a sentence of death into a more lenient penalty. If this be done and imprisonment take the place of capital
punishment, the question arises whether persons so imprisoned must be released at the end of the war, although their term of
imprisonment has not yet expired. Some answer this question in the affirmative, maintaining that it could never be lawful to
inflict a penalty extending beyond the duration of war. But is believed that the question has to be answered in the negative. If a
belligerent has a right to pronounce a sentence of a capital punishment, it is obvious that he may select more lenient penalty
and carry it out even beyond the duration of the war. It would in no wise be in interest of humanity to deny this right, for
otherwise belligerents would be tempted always to pronounce and carry out a sentence of capital punishment in the interest of
self-preservation.

SEC. 257a. The right of belligerent to punish, during the war, such war criminals are fall into his hands is a well-recognized
principle of International Law. It is a right of which he may effectively avail himself after he has occupied all or part of enemy
territory, and is thus in the position to seize war criminals who happen to be there. He may, as a condition of the armistice,
impose upon the authorities of the defeated State the duty to hand over persons charged with having committed war crimes,
regardless of whether such persons are present in the territory actually occupied by him or in the territory which, at the
successful end of hostilities, he is the position to occupy. For in both cases the accused are, in effect, in his power. And
although normally the Treaty of Peace brings to an end the right to prosecute war criminals, no rule of International Law
prevents the victorious belligerent from imposing upon the defeated State the duly, as one of the provisions of the armistice or
the Peace Treaty, to surrender for trial persons accused of war crimes. In this, as in other matters, the will of the victor is the
law of the Treaty. It is not to be expected that he will concede to the defeated State the corresponding right to punish any war
criminals of the victorious belligerent. The resulting inequality is the unavoidable concomitant of the existing imperfections of
international organization and of the institution of war itself. But the victorious belligerent may achieve a substantial
approximation to justice by making full provision for a fair trial of the surrender enemy nationals, and by offering to try before
his tribunals such members of his own armed forces are accused of war crimes. Such conduct may go a long way towards
reducing substantially the inequality of treatment as between the victor and the vanquished.
The permissible acts of warfare are, by the authority of long and common usage, strictly limited. The treaties entered into between
members of the family of nation are but specific definitions and reinforcements of the general common law nations, the "unwritten" rules
of warfare, which for centuries have limited the method and manner of conducting wars. The common law of nations, by which all states
are and must be bound, dictates that warfare shall be carried on only in accordance with basic considerations of humanity and chivalry.

These matters are of course well known to the German and Japanese warlords and statement, as well as to their henchmen. They will
also believe the brutal pronouncements of German military philosophy in such cynical handbooks for the guidance of officers as
the Kriegsbrauch im Lambkrege in which, although Germany had to observe the provisions of the Hague Convention regulating
warfare, their human tenets of international law are referred to as expressed generally "sentimentalism and flabby emotionalism " and
are declared to be "in fundamental contradiction with the nature of war and its objects"; and in which the German officer is sternly
warned to "guard himself against exaggerated humanitarian ideas."

From Doctor Glueck's book we quote:

If there was a domain to which Mr. Justice Holmes' illuminating dictum about a page of history being worth a volume of logic is
applicable, it is that concern the war criminal's problem (P. 12.) The law of nations has a long way to go before it can claim to
be coherent and fixed system. Its relevant tenets were develop under the presupposition the members of the community of
nations are governed by self-imposed restraints in accordance with international law; but the emergence of states with a
national policy of deliberate lawlessness and with their invasion of 'total war in the service of a program of world enslavement,
compels a realistic modification of inadequate doctrines and principles of the law (P.13). Nobody who has made a thorough
study of the status of the branch of law of nations involved can adhere to the view that it is anywhere near as well developed
or subject to the same techniques of "rigorous legal logic" as the more sophisticated branches of private law. (P14). On
September 18, 1942, Churchill assured the House of Commons that "those who are guilty of the nazi crimes will have to stand
up before tribunals in very land where their atrocities have been committed, in order that an indelible warning men given to
future ages and that successive generations of men may say, "so perish all who do the like again."

On January 25, 1919, the preliminary peace conference of World War No. I set upon a commission of fifteen to inquire into and report
upon violations of international law chargeable to Germany and her allies. This commission recommended the setting up of a high
tribunals which was to apply "the principles of the law of nation as the result from the usages established among civilized peoples, from
the laws of humanity and from the dictates of public conscience." Upon a finding of guilty, the court could sentence to such punishment
as could be imposed foe the offense in question "by any court in any country represented on the tribunal or in the country of the
convicted persons." The recommendation was not adopted. They were opposed by American and Japanese members. The Japanese
members raised the basic question, among others, "whether international law recognizes a penal law as applicable to those who are
guilty." And it seemed to them "important to consider the consequences which would be created in the history of international law the
prosecution for breaches of the or customs of war enemy states before a tribunal constituted by the opposite party," an argument
rejected at the treaty.

In the Treaty of Versailles there were inserted the punitive articles 228, 229 and 230. By the article 288 the German Government
recognized "the right of the allied and associated powers to bring before the military tribunals persons accused of having committed
acts in violation of the laws to "punishments laid down by law." Article 299 provided for the trial of accused in military tribunals of the
power against whose the nationals the alleged crimes were committed and the specified that "in every case the accused will be entitled
to name his own counsel."

9. SOME CONCLUSIONS

From all the foregoing, with regards to the petition for a writ of habeas corpus, we conclude:

(1) That petitioner Yamashita, if he is responsible for the acts imputed to him in the charges filed before the Military Commission can
properly and justly be prosecuted and punished for them.

(2) That the fact that he has the Commander in Chief of a belligerent army does not exempt him from criminal liability either for
violations of international law or for the commission of crimes defined and punishable under the laws of the country where committed.

(3) That his rights and privileges as a prisoners of war, under the Geneva Convention, are not incompatible with nor are violated by his
prosecution for the international and domestic crimes committed by him.

(4) That under the principles of natural law, all persons guilty of such crimes are amenable to be arraigned before a court of the justice
and, after a fair trial, if found guilty, should bear the full weight of the law.

(5) That petitioner Yamashita can be prosecuted before the Philippine civil courts in the like manner as a common criminal and the
punished under the provisions of the Philippine Penal Code.
(6) That the military Commission set up to try him possesses a jurisdiction which is concurrent with that of the Philippine civil courts,
and the choice of the competent tribunal where he should be tried, which a mere procedural technically, is left to the wise discretion of
the officials in charge of the prosecution.

(7) That in violation of the law of nations, the offended party is the people of the whole world, and the case against petitioner could be
properly entitled as Humanity versus Tomoyuki Yamashita," and no person in position to prosecute the violators can honesty shirk the
responsibility of relentlessly prosecuting them, lest he be branded with the stigma of complicity.

(8) That the absence of a codified International Penal Code or of a criminal law adopted by the comity of nations with specific penalties
for specific and well-defined international crimes, is not a bar to the prosecution of war criminals, as all civilized nations have provided
in their laws the necessary punishment for war crimes which, for their very nature, cease to be lawful acts of war, and become ordinary
crimes with the extraordinary character of having been committed in connection with war, which should be considered as an
aggravating circumstance.

10. THE SUPREME COURT'S JURISDICTION

Whether this Court has jurisdiction or not to take cognizance of this case is the first question raised herein.

We believe that no doubt should be entertained that it has.

The petition pertains to a judicial case, to a case wherein justice is to be administered. It is a criminal case initiated for the prosecution
and punishment of Tomoyuki Yamashita, Commander Chief of the Japanese Army in the Philippines, alleged as the greatest war
criminal in the Pacific and in the Whole eastern hemisphere.

The case calls for the exercise of the judicial power, one of the three government powers, firstly defined by Aristotle and upon which
Montesquieu elaborated later in his "Spirit of the Laws."

The judicial power shall be vested in one Supreme Court and in such inferior courts as may be established by law. (Art. VIII,
sec. 1, Constitution of the Philippines.)

By this provision, the judicial power is primarily vested in the Supreme Court, which exclusively exercise the whole power. But it also
authorizes the enactment of laws sharing the power to inferior courts, which include all other courts and tribunals of all description,
whether ordinary or extraordinary, whether civil or criminal, whether industrial or military, whether designated as "courts" or simply as
"commissions."

The Congress shall the power to define, prescribe, and apportion the jurisdiction of the various courts, but may not deprive the
Supreme Court of its original jurisdiction over cases affecting ambassadors, other public ministers, and consuls, nor of its
jurisdiction to review, revise, reverse, modify, or affirm on appeal, certiorari, or writ of error, as the law or the law of the rules of
court may provide, final judgments and decrees of inferior courts in —

(1) All cases in which the constitutionality or validity of any treaty, law, ordinance, or executive order or regulation is in
question.

(2) All cases involving the legality of any tax, impost, assessment, or toll, or any penalty imposed in relation thereto.

(3) All cases in which the jurisdiction in which of any trial court is in issue.

(4) All criminal cases in which the penalty imposed is death or life imprisonment.

(5) All cases in which an error or question of law in involved.

(Art. VIII, sec. 2, Constitution of the Philippines.)

From the foregoing it is evident that this Supreme Court has jurisdiction, which Congress is powerless to abolish, to review, revise,
reverse, modify, or affirm any and all actuations of judicial nature of the party respondent and the Military Commission before whom
petitioner Yamashita tried is for his life. In facts, this Supreme Court's jurisdiction extends, not only to courts and judicial institutions, but
to all persons, and agencies which form part of the whole machinery of the administration of the justice, in so far as is necessary to the
administration of the justice.

We have jurisdiction over the person of respondent Lt. Gen. Wilhelm D. Styer, not as to the discharge of his military functions and
duties, but in regards to his official acts in connection with the administration of justice in the criminal case against Tomoyuki
Yamashita, and that jurisdiction became effective since November 13, 1945, his refusal to sign receipt for the summons and the refusal
of the subordinate officers in his officers in his office to accept said and the summoning of said military commission.
No one questions our jurisdiction over the person of petitioner, he having voluntarily submitted himself to it by his petition.

With respect to the military commission trying him, under the questions raised in the petition, it is a proper party respondent and the
petitioner should have included it as among the party respondents. But petitioner's omission is just a technical error of no vital
consequence, because under the judicial rules, we can order the inclusion and the summoning of said military commission.

The amici curiae want to us to be cautious and slow in exercising jurisdiction in this case, in view of the possibility that our orders might
be disregarded by the military officers concerned. The fear entertained by the amici curiaemight find some ground in the attitude of
respondent General Styer, when the latter refused to sign receipt for the summons or to receive the papers thereof.

The same warning has been made in a case decided by this Supreme Court several weeks ago. In answer to the warning, we can do
no better than to repeat what we said therein.

It has been argued with energy by those who oppose our issuing the order for the release of the petitioners, that if we decide
to issue it, the United States Army might refuse to set them at liberty, with the result that the order of release will become a
mere scrap of paper and the Supreme Court of the Philippines will be placed in the unenviable position of utter ridicule. We
have to answer in the most definite way that we can not agree with such a narrow point of view.

But suppose the most unexpected should happen, that there might be members of the United States Armed Forces who will
be blind enough to ignore the order of this Supreme Court, to make a mockery of the administration of justice, shall that
unthinkable hypothesis deter us from doing our duty? Our answer is a simple. No. No one and nothing in the whole world,
neither the all-powerful army which humbled Germany and forced the surrender of the "invincible" Japanese Army, nor
weapons more dreadful than the atomic bomb, the menace of an imminent catastrophe, shall be powerful enough to make us
flinch from complying with our plain duty as Justices of the Supreme Court. We must do our duty as our conscience dictates,
without fear nor favor. It is our duty to make reason and right supreme regardless of consequences. Law and justice might
suffer setbacks, endure eclipses, but at the end they shall reign with all the splendors of the real majesty.
(Raquiza vs. Bradford, G.R. No. L-44, pp. 76, 88, ante, dissenting.)

We recognized no one to be above the law. Mere military might cannot change and nullify the course of justice. In the long run,
everybody must have to bow and prostrate himself before the supreme majesty of the law.

11. HABEAS CORPUS

In praying for a writ of habeas corpus, petitioner wants us to order that he be returned from the status of an accused war criminal to that
of a prisoner of war.

He is not seeking release from confinement.

We are of opinion that the petition for a a writ of habeas corpus must be denied. The purpose of said writ is to restore liberty to a person
who is being deprived of it without due process of law. Such is not the case of petitioner. He does not complain of any illegal detention
or deprivation of personal freedom.

He is deprived of his liberty because he is, according to his own allegation, a prisoners of war. Whether or not he should be accused as
a war criminal, is not a proper question to be raised in habeas corpus proceeding.

The fact that petitioner is an accused war criminal does not change his status as a war prisoner. He remains to be so, whether he is
prosecuted as a war prisoner because he was placed and regarded as war criminal or not.

Not having lost his status as a war prisoners because he was placed and regarded as a war criminal, there is no reason for ordering his
reversion to a status which he did not cease to retain since his surrender or capture on September 2, 1945.

For these reasons we voted for the denial of the writ of habeas corpus.

12. JURISDICTION OF THE MILITARY COMMISSION

We are opinion that the Military Commission conducting the trial of petitioner has jurisdiction to try him for the crimes alleged in the 123
items in the specified charges filed against him.

From the very allegations and exhibits of petitioner it appears that said Military Commission was created and organized by orders of
General Douglas MacArthur, Commandeer in Chief of the United States Army Forces in Western Pacific.

We are of opinion that said Commander in Chief has authority to convene said Military Commission.
Petitioner contends that "there being no marital law, active hostilities in the Philippine Islands at the time of the appointment of the
commission, there was no authority to appoint the commission, and the commission in without jurisdiction.

We do not agree with the contention. Neither martial law, nor the existence of Military Government, nor the waging of active hostilities is
a prerequisite for exercising the power of appointing a Military Commission.

In the absence of pre-established tribunals clothed with authority to try war criminals, Military Commission may be established for said
purpose, and unless organized by the Chief Executive himself they may be organized by the military Commander in Chief, representing
said Chief Executive.

The American Representatives (Lansing and Scott) in the Allied commission of 15 organized after the first World War, although
opposed, with the Japanese Representatives, the creation of an international criminal court, which became abortive, were of opinion
that war criminals may be tried by Military Commission of the offended countries.

13. COLLECTIVE RESPONSIBILITY

Although we maintain that the Military Commission here in question has jurisdiction to try the case for war crimes against petitioner
Yamashita, in the regulations governing the trial of war criminals, Exhibit F, there are several features which should not be left
unchallenged. Section 4-b, under the title of "Jurisdiction" of Exhibit F, provides: "Any military or naval unit or any official or unofficial
group or organization whether or not still in existence, may be charged with criminal acts or complicity therein and tried by a Military
Commission."

This provision, undoubtedly, advances the principle of collective responsibility in contradistinction to the principle of individual criminal
responsibility.

Under the principle of individualized criminal responsibility, no person may be convicted of any offense without due process of law and
without proving in said process in which he should also enjoy the guarantee of equal protection of the laws, that the he is personally
guilty of the offense.

Under the principle of collective criminal responsibility, any member of any social group or organization may be convicted without any
hearing if, in a process where he did not have his day in court, the social group or any other member thereof is found guilty of an
offense.

During the Japanese regime, when a member of a family was found by the military police, with or without ground, as responsible for an
alleged offense or being a member of a guerrilla unit, the remaining members of his family were also made to suffer.

When a town or barrio was suspected of harboring guerrilleros, the Japanese would punish the whole town or barrio by mowing down
all the inhabitants, or burning all the houses, or, at least, subjecting all the male inhabitants thereof to brutal zonings. The ruins of
Manila are graphic illustrations of how the principle worked.

It is unnecessary to elaborate more to show the grave iniquities to which the principle of collective criminal responsibility leads.

We are of opinion that said principle violates the constitutional guarantee of due process of law and therefore, we should have issued a
writ of prohibition enjoining the Military Commission from exercising the unconstitutional jurisdiction granted in section 4-b of Exhibit F.

14. EVIDENCE

Section 16 (1), under the title of "Evidence," provides what may be admitted as evidence as follows: "Any document which appears to
the commission to have been signed or issued officially by any officer, department, agency, or member of the armed forces of any
government, without proof of the signature or of the issuance of the document."

The following may also be admitted as evidence according to section 16 (3): "Affidavits depositions, or other statements taken by an
officer detailed for that purpose by military authority."

We are of opinion that the admission of documents as evidence, "without proof of the signature or of the issuance of the document," is
a denial of the due process of law constitutionally guaranteed to all persons before he could be deprived of his life, liberty, or property.
The authenticity or genuiness of a document is an essential element in order that it may acquire the nature of an evidence. Proof of
signature of the issuance of the document is essential to show its genuiness.

The admission of affidavits "or other statements taken by an officer detailed for that purpose by military authority" is clear violation of
the constitutional guarantee that in all criminal prosecution that accused shall enjoy the right" to meet the witness face to face." (Art. III,
sec. 1 [17], Constitution of the Philippines.) The Military Commission accepted as evidence against accused Yamashita the affidavits of
Naokata Utsunomiya (Exhibits L and M), denying said Yamashita the constitutional right "to meet face to face affiant Naokata
Utsunomiya.

According to section 16 (4) of the regulations (Exhibit F); "Any diary, letter or other document appearing to the to the commission to
contain information relating to the charge," may also be admitted as evidence. This provision denies also to the accused the
constitutional guarantee of meeting a witness face and, therefore, of cross-examining him.

We are of opinion that the admission of evidence above-mentioned must be prohibited, and that a writ of prohibition issued by the Court
is a proper remedy.

15. HEARSAY

The regulations (Exhibit F) authorizes also the admission of hearsay as evidence.

Section 16-d of said regulation provides: "If the accused is charged with an offense involving concerted criminal action upon the part of
a military of naval unit, or any group or organization, evidence which has been given previously at a trial of any member of that unit,
group or organization, relative to that concerted offense, may be received as prima facie evidence that the accused likewise is guilty of
that offense."

In section 16-e, the objectionable feature of a hearsay evidence is aggravated by the adherence to the principles of collective criminal
responsibility. It provides: "The findings and judgment of a commission in any trial of sa unit, group or organization with respect to the
criminal character, purpose or activities thereof shall given full faith and credit in any subsequent trial by that or any other commission of
an individual person charged with criminal responsibility through membership in such unit, group or organization convicted by the
commission, the burden of the proof shall shift to the accused to establish any mitigating circumstances relating to his membership or
participation therein."

We are opinion, too, that the Military Commission should be prohibited to follow the unjust procedures delineated in the above-quoted
provisions, the objectionable character of which was explicitly admitted even by the amicus curiae who appeared to argue in this case
in opposition to the granting of remedies sought by petitioner.

16. FUNDAMENTAL RIGHTS GUARANTEED TO EVERYBODY

No matter who the petitioner is, we are of opinion that he is entitled to all the safeguard of a fair trial.

The fundamental rights freedoms guaranteed in the Charter of the United Nations are guaranteed to all human beings, without
exception.

In his annual proclamation setting November 22, 1945, as Thanksgiving Day, President Truman, among other things, said: "Liberty
knows no race, creed or class in our country or in the world. In unity we found our first weapon, for without it, both here and abroad, we
were doomed. None have known this better than our very gallant dead, none better than their comrade Franklin Delano Roosevelt. Our
Thanksgiving has the humility of our deep mourning for them, our vast gratitude for them.

"Triumph over the enemy has not dispelled very difficulty. Many vital and far-reaching decisions await us as we strive for a just and
enduring peace. We will not fail if we preserve, in our own land and throughout the world, the same devotion to the essential freedoms
and rights of mankind which sustained us throughout the war and brought us final victory."

And Prime Minister Attlee, in the face of the potential destructiveness of the atom bomb, said before the English Parliament: "It is well
that we should make up our minds that in a war on the scale to that which we have just emerged every weapon will be used. We may
confidently expect the fullest destruction of great cities, death of millions and the setting back of civilization to an unimaginable extent.

"No system of safeguards which could be devised will of itself — I emphasized of itself — provide an effective guarantee against
production of automatic weapons by a nation or nations bent on aggression.

"With the terrible march of the science of destruction, every nation will realize more urgently the overwhelming need to maintain the rule
of the law among nations and to banish the scourage of war from the earth.

"We have in prospect the meeting of United Nations Organization and there is an instrument which, if all are resolved to use it, could
establish the rule of the law and prevent war — I resolved."

In the eternal struggle between the principles of right and wrong, there no choice if humanity must survive. Lincoln said: "That is the real
issue that will continue in this country when these poor tongues of Judge Douglas and myself shall be silent. It is the eternal struggle
between these two principles, right and wrong, throughout the world. They are the two principles that have stood face to face from the
beginning of time."
When we voted for the granting of the writ of prohibition, we did it out of consistency, as the vibrant words of Jefferson must no cease
ringing ours in ours ears when he said: "What a stupendous, what an incomprehensible machine is man! who can endure toil, famine,
stripes, imprisonment, and death itself, in vindication of his own liberty, and, the next moment be deaf to all those motives whose power
supported him through his trial, and inflict on his fellowmen a bandage, one our of which is fraught with more misery than ages of that
which he rose in rebellion to oppose."

17. NEEDED SERVICE TO THE MORAL AND CULTURAL PURPOSES OF HUMANITY

If petitioner is tried and convicted under a process in which some of the recognized essential guarantees for a fair trial are violated, it
would produce a result opposite that expected by those who are following up the trials of all war criminals; the arousing of a deep-
rooted universal conviction that law must be supreme and that justice should be equally administered to each and very member of
humanity.

The peoples of all nations who are keenly watching the prosecution of Yamashita should be convicted, by conclusive evidence, that
said prosecution is not a mere parody of the administration of justice, devised to disguise the primitive impulses of vengeance and
retaliation, the instinctive urge to crush at all costs, no matter what the means, hated fallen enemy.

The prosecution, trial, and conviction of Yamashita must impress all the peoples of the world that the principle of law is paramount, and
supersedes and wipes out all other considerations in dealing with war or common criminals. Otherwise, their faith in the supremacy of
law as the invulnerable bulwark of all fundamental human rights will be shaken, and the moral position of the victorious United Nations,
the ethical value of the grandiose pronouncements of their leaders, and the profound significance of the lofty ideals for which millions of
their soldiers have fought and died, will be weakened and diminished to such an extent as to make barren all the tremendous sacrifices
made by so many countries and so many peoples in the last global hecatomb.

It was Ihering who, in his " LAW AS A MEANS TO AN END ," said that: "There is no human life which exist merely for itself, every one
is at the same time for the same of the world: every man in his place, however limited it may be, is a collaborator in the cultural
purposes of humanity . . . . I cannot imagine a human life so poor, so devoid of content, so narrow, so miserable, that it is not of some
good to some other life; even such a life has not seldom borne the world the richest fruit." (Page 60.)

So even the shameful exploits in the Philippines with which Yamashita ingloriously crowned his military career, at its peak when he
conquered Malaya and Singapore, and descended from the pedestal of the greatest Nippon military hero in all her history to the moral
abyss of that abominable monstrous figure, the greatest war criminal in Asia and in the Pacific, cannot put render some service to the
cultural purposes of humanity if, by his due trial in accordance with the elemental rules in the criminal procedure, the sense of law and
justice is further developed in the conscience of the present and future generations.

18. OUR VOTE

From all foregoing, when the resolution to dispose of this case was put to a vote, we concurred in the denial of the petition for a writ
of habeas corpus, and we voted for the granting of the writ of prohibition in order that the objectionable features in the trial before the
Military Commission may be eliminated, so that petitioner Yamashita may be given the full justice due to all human beings.
 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-2662 March 26, 1949

SHIGENORI KURODA, petitioner,

vs.
Major General RAFAEL JALANDONI, Brigadier General CALIXTO DUQUE, Colonel MARGARITO TORALBA, Colonel IRENEO
BUENCONSEJO, Colonel PEDRO TABUENA, Major FEDERICO ARANAS, MELVILLE S. HUSSEY and ROBERT
PORT, respondents.

Pedro Serran, Jose G. Lukban, and Liberato B. Cinco for petitioner.

Fred Ruiz Castro Federico Arenas Mariano Yengco, Jr., Ricardo A. Arcilla and S. Melville Hussey for respondents.

MORAN, C.J.:

Shigenori Kuroda, formerly a Lieutenant-General of the Japanese Imperial Army and Commanding General of the Japanese Imperial
Forces in The Philippines during a period covering 19433 and 19444 who is now charged before a military Commission convened by
the Chief of Staff of the Armed forces of the Philippines with having unlawfully disregarded and failed "to discharge his duties as such
command, permitting them to commit brutal atrocities and other high crimes against noncombatant civilians and prisoners of the
Imperial Japanese Forces in violation of the laws and customs of war" — comes before this Court seeking to establish the illegality of
Executive Order No. 68 of the President of the Philippines: to enjoin and prohibit respondents Melville S. Hussey and Robert Port from
participating in the prosecution of petitioner's case before the Military Commission and to permanently prohibit respondents from
proceeding with the case of petitioners.

In support of his case petitioner tenders the following principal arguments.

First. — "That Executive Order No. 68 is illegal on the ground that it violates not only the provision of our constitutional law but also our
local laws to say nothing of the fact (that) the Philippines is not a signatory nor an adherent to the Hague Convention on Rules and
Regulations covering Land Warfare and therefore petitioners is charged of 'crimes' not based on law, national and international." Hence
petitioner argues — "That in view off the fact that this commission has been empanelled by virtue of an unconstitutional law an illegal
order this commission is without jurisdiction to try herein petitioner."

Second. — That the participation in the prosecution of the case against petitioner before the Commission in behalf of the United State
of America of attorneys Melville Hussey and Robert Port who are not attorneys authorized by the Supreme Court to practice law in the
Philippines is a diminution of our personality as an independent state and their appointment as prosecutor are a violation of our
Constitution for the reason that they are not qualified to practice law in the Philippines.

Third. — That Attorneys Hussey and Port have no personality as prosecution the United State not being a party in interest in the case.

Executive Order No. 68, establishing a National War Crimes Office prescribing rule and regulation governing the trial of accused war
criminals, was issued by the President of the Philippines on the 29th days of July, 1947 This Court holds that this order is valid and
constitutional. Article 2 of our Constitution provides in its section 3, that —

The Philippines renounces war as an instrument of national policy and adopts the generally accepted principles of international
law as part of the of the nation.

In accordance with the generally accepted principle of international law of the present day including the Hague Convention the Geneva
Convention and significant precedents of international jurisprudence established by the United Nation all those person military or civilian
who have been guilty of planning preparing or waging a war of aggression and of the commission of crimes and offenses consequential
and incidental thereto in violation of the laws and customs of war, of humanity and civilization are held accountable therefor.
Consequently in the promulgation and enforcement of Execution Order No. 68 the President of the Philippines has acted in conformity
with the generally accepted and policies of international law which are part of the our Constitution.

The promulgation of said executive order is an exercise by the President of his power as Commander in chief of all our armed forces as
upheld by this Court in the case of Yamashita vs. Styer (L-129, 42 Off. Gaz., 664) 1 when we said —

War is not ended simply because hostilities have ceased. After cessation of armed hostilities incident of war may remain
pending which should be disposed of as in time of war. An importance incident to a conduct of war is the adoption of measure
by the military command not only to repel and defeat the enemies but to seize and subject to disciplinary measure those
enemies who in their attempt to thwart or impede our military effort have violated the law of war. (Ex parte Quirin 317 U.S., 1;
 63 Sup. Ct., 2.) Indeed the power to create a military commission for the trial and punishment of war criminals is an aspect of
waging war. And in the language of a writer a military commission has jurisdiction so long as a technical state of war
continues. This includes the period of an armistice or military occupation up to the effective of a treaty of peace and may
extend beyond by treaty agreement. (Cowles Trial of War Criminals by Military Tribunals, America Bar Association Journal
June, 1944.)

Consequently, the President as Commander in Chief is fully empowered to consummate this unfinished aspect of war namely the trial
and punishment of war criminal through the issuance and enforcement of Executive Order No. 68.

Petitioner argues that respondent Military Commission has no Jurisdiction to try petitioner for acts committed in violation of the Hague
Convention and the Geneva Convention because the Philippines is not a signatory to the first and signed the second only in 1947. It
cannot be denied that the rules and regulation of the Hague and Geneva conventions form, part of and are wholly based on the
generally accepted principals of international law. In facts these rules and principles were accepted by the two belligerent nation the
United State and Japan who were signatories to the two Convention, Such rule and principles therefore form part of the law of our
nation even if the Philippines was not a signatory to the conventions embodying them for our Constitution has been deliberately general
and extensive in its scope and is not confined to the recognition of rule and principle of international law as continued inn treaties to
which our government may have been or shall be a signatory.

Furthermore when the crimes charged against petitioner were allegedly committed the Philippines was under the sovereignty of United
States and thus we were equally bound together with the United States and with Japan to the right and obligation contained in the
treaties between the belligerent countries. These rights and obligation were not erased by our assumption of full sovereignty. If at all our
emergency as a free state entitles us to enforce the right on our own of trying and punishing those who committed crimes against
crimes against our people. In this connection it is well to remember what we have said in the case of Laurel vs. Misa (76 Phil., 372):

. . . The change of our form government from Commonwealth to Republic does not affect the prosecution of those charged
with the crime of treason committed during then Commonwealth because it is an offense against the same sovereign people. .
..

By the same token war crimes committed against our people and our government while we were a Commonwealth are triable and
punishable by our present Republic.

Petitioner challenges the participation of two American attorneys namely Melville S. Hussey and Robert Port in the prosecution of his
case on the ground that said attorney's are not qualified to practice law in Philippines in accordance with our Rules of court and the
appointment of said attorneys as prosecutors is violative of our national sovereignty.

In the first place respondent Military Commission is a special military tribunal governed by a special law and not by the Rules of court
which govern ordinary civil court. It has already been shown that Executive Order No. 68 which provides for the organization of such
military commission is a valid and constitutional law. There is nothing in said executive order which requires that counsel appearing
before said commission must be attorneys qualified to practice law in the Philippines in accordance with the Rules of Court. In facts it is
common in military tribunals that counsel for the parties are usually military personnel who are neither attorneys nor even possessed of
legal training.

Secondly the appointment of the two American attorneys is not violative of our nation sovereignty. It is only fair and proper that United
States, which has submitted the vindication of crimes against her government and her people to a tribunal of our nation should be
allowed representation in the trial of those very crimes. If there has been any relinquishment of sovereignty it has not been by our
government but by the United State Government which has yielded to us the trial and punishment of her enemies. The least that we
could do in the spirit of comity is to allow them representation in said trials.

Alleging that the United State is not a party in interest in the case petitioner challenges the personality of attorneys Hussey and Port as
prosecutors. It is of common knowledge that the United State and its people have been equally if not more greatly aggrieved by the
crimes with which petitioner stands charged before the Military Commission. It can be considered a privilege for our Republic that a
leader nation should submit the vindication of the honor of its citizens and its government to a military tribunal of our country.

The Military Commission having been convened by virtue of a valid law with jurisdiction over the crimes charged which fall under the
provisions of Executive Order No. 68, and having said petitioner in its custody, this Court will not interfere with the due process of such
Military commission.

For all the foregoing the petition is denied with costs de oficio.

Paras, Feria, Pablo, Bengzon, Tuason, Montemayor and Reyes, JJ., concur.
Separate Opinions

PERFECTO, J., dissenting:

A military commission was empanelled on December 1, 1948 to try Lt. Gen. Shigenori Kuroda for Violation of the laws and customs of
land warfare.

Melville S. Hussey and Robert Port, American citizens and not authorized by the Supreme Court to practice law were appointed
prosecutor representing the American CIC in the trial of the case.

The commission was empanelled under the authority of Executive Order No. 68 of the President of the Philippines the validity of which
is challenged by petitioner on constitutional grounds. Petitioner has also challenged the personality of Attorneys Hussey and Port to
appear as prosecutors before the commission.

The charges against petitioner has been filed since June 26, 1948 in the name of the people of the Philippines as accusers.

We will consideration briefly the challenge against the appearance of Attorneys Hussey and Port. It appearing that they are aliens and
have not been authorized by the Supreme Court to practice law there could not be any question that said person cannot appear as
prosecutors in petitioner case as with such appearance they would be practicing law against the law.

Said violation vanishes however into insignificance at the side of the momentous question involved in the challenge against the validity
of Executive Order No. 68. Said order is challenged on several constitutional ground. To get a clear idea of the question raised it is
necessary to read the whole context of said order which is reproduced as follows:

EXECUTIVE ORDER NO. 68.

ESTABLISHING A NATIONAL WAR CRIMES OFFICE AND PRESCRIBING RULES AND REGULATION
GOVERNING THE TRIAL OF ACCUSED WAR CRIMINAL.

I, Manuel Roxas president of the Philippines by virtue of the power vested in me by the Constitution and laws of the Philippines
do hereby establish a National War Crimes Office charged with the responsibility of accomplishing the speedy trial of all
Japanese accused of war crimes committed in the Philippines and prescribe the rules and regulation such trial.

The National War crimes office is established within the office of the Judge Advocate General of the Army of the Philippines
and shall function under the direction supervision and control of the Judge Advocate General. It shall proceed to collect from
all available sources evidence of war crimes committed in the Philippines from the commencement of hostilities by Japan in
December 1941, maintain a record thereof and bring about the prompt trial maintain a record thereof and bring about the
prompt trial of the accused.

The National War Crimes Office shall maintain direct liaison with the Legal Section General Headquarters, Supreme
Commander for the Allied power and shall exchange with the said Office information and evidence of war crimes.

The following rules and regulation shall govern the trial off person accused as war criminals:

ESTABLISHMENT OF MILITARY COMMISSIONS

(a) General. — person accused as war criminal shall be tried by military commission to be convened by or under the authority
of the Philippines.

II. JURISDICTION

(a) Over Person. — Thee military commission appointed hereunder shall have jurisdiction over all persons charged with war
crimes who are in the custody of the convening authority at the time of the trial.

(b) Over Offenses. — The military commission established hereunder shall have jurisdiction over all offenses including but not
limited to the following:

(1) The planning preparation initiation or waging of a war of aggression or a war in violation of international treaties agreement
or assurance or participation in a common plan or conspiracy for the accomplishment of any of the foregoing.

(2) Violation of the laws or customs of war. Such violation shall include but not be limited to murder ill-treatment or deportation
to slave labor or for other purpose of civilian population of or in occupied territory; murder or ill-treatment of prisoners of war or
internees or person on the seas or elsewhere; improper treatment of hostage; plunder of public or private property wanton
destruction of cities towns or village; or devastation not justified by military necessity.

(3) Murder extermination enslavement deportation and other inhuman acts committed against civilian population before or
during the war or persecution on political racial or religion ground in executive of or in connection with any crime defined herein
whether or not in violation of the local laws.

III. MEMBERSHIP OF COMMISSIONS

(a) Appointment. — The members of each military commission shall be appointed by the President of the Philippines or under
authority delegated by him. Alternates may be appointed by the convening authority. Such shall attend all session of the
commission, and in case of illness or other incapacity of any principal member, an alternate shall take the place of that
member. Any vacancy among the members or alternates, occurring after a trial has begun, may be filled by the convening
authority but the substance of all proceeding had evidence taken in that case shall be made known to the said new member or
alternate. This facts shall be announced by the president of the commission in open court.

(b) Number of Members. — Each commission shall consist of not less than three (3) members.

(c) Qualifications. — The convening authority shall appoint to the commission persons whom he determines to be competent
to perform the duties involved and not disqualified by personal interest or prejudice, provided that no person shall be appointed
to hear a case in which he personally investigated or wherein his presence as a witness is required. One specially qualified
member whose ruling is final in so far as concerns the commission on an objection to the admissibility of evidence offered
during the trial.

(d) Voting. — Except as to the admissibility of evidence all rulings and finding of the Commission shall be by majority vote
except that conviction and sentence shall be by the affirmative vote of not less than conviction and sentence shall be by the
affirmative vote of not less than two-thirds (2\3) of the member present.

(e) Presiding Member. — In the event that the convening authority does not name one of the member as the presiding
member, the senior officer among the member of the Commission present shall preside.

IV. PROSECUTORS

(a) Appointment. — The convening authority shall designate one or more person to conduct the prosecution before each
commission.

(b) Duties. — The duties of the prosecutor are:

(1) To prepare and present charges and specifications for reference to a commission.

(2) To prepare cases for trial and to conduct the prosecution before the commission of all cases referred for trial.

V. POWER AND PROCEDURE OF COMMISSION

(a) Conduct of the Trial. — A Commission shall:

(1) Confine each trial strictly to fair and expeditious hearing on the issues raised by the charges, excluding irrelevant issues or
evidence and preventing any unnecessary delay or interference.

(2) Deal summarily with any contumacy or contempt, imposing any appropriate punishment therefor.

(3) Hold public session when otherwise decided by the commission.

(4) Hold each session at such time and place as it shall determine, or as may be directed by the convening authority.

(b) Rights of the Accused. — The accused shall be entitled:

(1) To have in advance of the trial a copy of the charges and specifications clearly worded so as to apprise the accused of
each offense charged.

(2) To be represented, prior to and during trial, by counsel appointed by the convening authority or counsel of his own choice,
or to conduct his own defense.
(3) To testify in his own behalf and have his counsel present relevant evidence at the trial in support of his defense, and cross-
examine each adverse witness who personally appears before the commission.

(4) To have the substance of the charges and specifications, the proceedings and any documentary evidence translated, when
he is unable otherwise to understand them.

(c) Witnesses. — The Commission shall have power:

(1) To summon witnesses and require their attendance and testimony; to administer oaths or affirmations to witnesses and
other persons and to question witnesses.

(2) To require the production of documents and other evidentiary material.

(3) To delegate the Prosecutors appointed by the convening authority the powers and duties set forth in (1) and (2) above.

(4) To have evidence taken by a special commissioner appointed by the commission.

(d) Evidence.

(1) The commission shall admit such evidence as in its opinion shall be of assistance in proving or disproving the charge, or
such as in the commission's opinion would have probative value in the mind of a reasonable man. The commission shall apply
the rules of evidence and pleading set forth herein with the greatest liberality to achieve expeditious procedure. In particular,
and without limiting in any way the scope of the foregoing general rules, the following evidence may be admitted:

(a) Any document, irrespective of its classification, which appears to the commission to have been signed or issued by any
officer, department, agency or member of the armed forces of any Government without proof of the signature or of the
issuance of the document.

(b) Any report which appears to the commission to have been signed or issued by the International Red Cross or a member of
any medical service personnel, or by any investigator or intelligence officer, or by any other person whom commission
considers as possessing knowledge of the matters contained in the report.

(c) Affidavits, depositions or other signed statements.

(d) Any diary, letter to other document, including sworn statements, appearing to the commission to contain information
relating to the charge.

(e) A copy of any document or other secondary evidence of the contents, if the original is not immediately available.

(2) The commission shall take judicial notice of facts of common knowledge, official government documents of any nation, and
the proceedings, records and findings of military or other agencies of any of the United Nation.

(3) A commission may require the prosecution and the defense to make a preliminary offer of proof whereupon the
commission may rule in advance on the admissibility of such evidence.

(4) The official position of the accused shall not absolve him from responsibility nor be considered in mitigation of punishment.
Further action pursuant to an order of the accused's superior, or of his Government, shall not constitute a defense, but may be
considered in mitigation of punishment if the commission determines that justice so requires.

(5) All purposed confessions or statements of the accused shall bee admissible in evidence without any showing that they
were voluntarily made. If it is shown that such confession or statement was procured by mean which the commission believe
to have been of such a character that may have caused the accused to make a false statement the commission may strike out
or disregard any such portion thereof as was so procured.

(e) Trial Procedure. — The proceedings of each trial shall be conducted substantially as follows unless modified by the
commission to suit the particular circumstances:

(1) Each charge and specification shall be read or its substance stated in open court.

(2) The presiding member shall ask each accused whether he pleads "Guilty" or "Not guilty."
 (3) The prosecution shall make its opening statement."(4) The presiding member may at this or any other time require the
prosecutor to state what evidence he proposes to submit to the commission and the commission thereupon may rule upon the
admissibility of such evidence.

(4) The witnesses and other evidence for the prosecution shall be heard or presented. At the close of the case for the
prosecution, the commission may, on motion of the defense for a finding of not guilty, consider and rule whether he evidence
before the commission may defer action on any such motion and permit or require the prosecution to reopen its case and
produce any further available evidence.

(5) The defense may make an opening statement prior to presenting its case. The presiding member may, at this any other
time require the defense to state what evidence it proposes to submit to the commission where upon the commission may rule
upon the admissibility of such evidence.

(6) The witnesses and other evidence for the defense shall be heard or presented. Thereafter, the prosecution and defense
may introduce such evidence in rebuttal as the commission may rule as being admissible.

(7) The defense and thereafter the prosecution shall address the commission.

(8) The commission thereafter shall consider the case in closed session and unless otherwise directed by the convening
authority, announce in open court its judgment and sentence if any. The commission may state the reason on which judgment
is based.

( f ) Record of Proceedings. — Each commission shall make a separate record of its proceeding in the trial of each case
brought before it. The record shall be prepared by the prosecutor under the direction of the commission and submitted to the
defense counsel. The commission shall be responsible for its accuracy. Such record, certified by the presiding member of the
commission or his successor, shall be delivered to the convening authority as soon as possible after the trial.

(g) Sentence. — The commission may sentence an accused, upon conviction to death by hanging or shooting, imprisonment
for life or for any less term, fine or such other punishment as the commission shall determine to be proper.

(h) Approval of Sentence. — No. sentence of a military commission shall be carried into effect until approved by the chief off
Staff: Provided, That no sentence of death or life imprisonment shall be carried into execution until confirmed by the President
of the Philippines. For the purpose of his review the Chief of Staff shall create a Board of Review to be composed of not more
than three officers none of whom shall be on duty with or assigned to the Judge Advocate General's Office. The Chief of Staff
shall have authority to approve, mitigate remit in whole or in part, commute, suspend, reduce or otherwise alter the sentence
imposed, or (without prejudice to the accused) remand the case for rehearing before a new military commission; but he shall
not have authority to increase the severity of the sentence. Except as herein otherwise provided the judgment and sentence of
a commission shall final and not subject to review by any other tribunal.

VI. RULE-MAKING POWER

Supplementary Rule and Forms. — Each commission shall adopt rules and forms to govern its procedure, not inconsistent
with the provision of this Order, or such rules and forms as may be prescribed by the convening authority]or by the President
of the Philippines.

VII. The amount of amount of seven hundred thousand pesos is hereby set aside out of the appropriations for the Army of the
Philippines for use by the National War Crimes Office in the accomplishment of its mission as hereinabove set forth, and shall
be expended in accordance with the recommendation of the Judge Advocate General as approved by the President. The
buildings, fixtures, installations, messing, and billeting equipment and other property herefore used by then Legal Section,
Manila Branch, of the General Headquarters, Supreme Commander for the Allied Power, which will be turned over by the
United States Army to the Philippines Government through the Foreign Liquidation Commission and the Surplus Property
Commission are hereby specification reserved for use off the National War Crimes Office.

Executive Order No. 64, dated August 16, 1945, is hereby repealed.

Done in the City of Manila, this 29th day of July in the year of Our Lord, nineteen hundred and forty-seven, and of the
Independence of the Philippines, the second.

Executive Order No. 68 is a veritable piece of Legislative measure, without the benefit of congressional enactment.

The first question that is trust at our face spearheading a group of other no less important question, is whether or not the President of
the Philippines may exercise the legislative power expressly vested in Congress by the Constitution. .
The Constitution provides:

The Legislative powers shall be vested in a Congress of the Philippines which shall consist of a Senate and House of
Representatives. (Section 1, Article VI.)

While there is no express provision in the fundamental law prohibiting the exercise of legislative power by agencies other than
Congress, a reading of the whole context of the Constitution would dispel any doubt as to the constitutional intent that the legislative
power is to be exercised exclusively by Congress, subject only to the veto power of the President of the President of the Philippines, to
the specific provision which allow the president of the Philippines to suspend the privileges of the writ of habeas corpus and to place
any part of the Philippines under martial law, and to the rule-making power expressly vested by the Constitution in the Supreme Court.

There cannot be any question that the member of the Constitutional Convention were believers in the tripartite system of government
as originally enunciated by Aristotle, further elaborated by Montequieu and accepted and practiced by modern democracies, especially
the United State of America, whose Constitution, after which ours has been patterned, has allocated the three power of government —
legislative, executive, judicial — to distinct and separate department of government.

Because the power vested by our Constitution to the several department of the government are in the nature of grants, not recognition
of pre-existing power, no department of government may exercise any power or authority not expressly granted by the Constitution or
by law by virtue express authority of the Constitution.

Executive Order No. 68 establishes a National War Crimes Office and the power to establish government office is essentially legislative.

The order provides that person accused as war criminals shall be tried by military commissions. Whether such a provision is
substantive or adjective, it is clearly legislative in nature. It confers upon military commissions jurisdiction to try all persons charge with
war crimes. The power to define and allocate jurisdiction for the prosecution of person accused of any crime is exclusively vested by the
Constitution in Congress. .

It provides rules of procedure for the conduct of trial of trial. This provision on procedural subject constitutes a usurpation of the rule-
making power vested by Constitution in the Supreme Court.

It authorized military commission to adopt additional rule of procedure. If the President of the Philippines cannot exercise the rule -
making power vested by the Constitution in the Supreme Court, he cannot, with more reason, delegate that power to military
commission.

It appropriates the sum of P7000,000 for the expenses of the National War Crimes office established by the said Executive Order No.
68. This constitutes another usurpation of legislative power as the power to vote appropriations belongs to Congress.

Executive Order No. 68., is, therefore, null and void, because, though it the President of the Philippines usurped power expressly
vested by the Constitution in Congress and in the Supreme Court.

Challenged to show the constitutional or legal authority under which the President issued Executive Order No. 68, respondent could not
give any definite answer. They attempted, however, to suggest that the President of the Philippines issued Executive Order No. 68
under the emergency power granted to him by Commonwealth Act No. 600, as amended by Commonwealth Act No. 620, and
Commonwealth Act No. 671, both of which are transcribed below:

COMMONWEALTH ACT NO. 600.

AN ACT DECLARING A STATE OF EMERGENCY AND AUTHORIZING THE PRESIDENT TO PROMULGATE

RULES AND REGULATION TO SAFEGUARD THE INTEGRITY OF THE PHILIPPINES AND TO INSURE THE
TRANQUILITY OF ITS INHABITANTS.

Be it enacted by the National Assembly of the Philippines:

SECTION 1. The existence of war in many parts of the world has created a national emergency which makes it necessary to
invest the President of the Philippines with extraordinary power in order to safeguard the integrity of the Philippines and to
insure the tranquility of its inhabitants, by suppressing espionage, lawlessness, and all subversive to the people adequate
shelter and clothing and sufficient food supply, and by providing means for the speedy evacuation of the civilian population the
establishment of an air protective service and the organization of volunteer guard units, and to adopt such other measures as
he may deem necessary for the interest of the public. To carry out this policy the President is authorized to promulgate rules
and regulations which shall have the force and effect off law until the date of adjournment of the next regulation which shall
have the force and effect of law until the date of adjournment of the next regular session of the First Congress of the
Philippines, unless sooner amended or repealed by the Congress of Philippines. Such rules and regulation may embrace the
following objects: (1) to suppress espionage and other subversive activities; (2) to require all able-bodied citizens (a) when not
engaged in any lawful occupation, to engage in farming or other productive activities or (b) to perform such services as may
bee necessary in the public interest; (3) to take over farm lands in order to prevent or shortage of crops and hunger and
destitution; (4) to take over industrial establishment in order to insure adequate production, controlling wages and profits
therein; (5) to prohibit lockouts and strikes whenever necessary to prevent the unwarranted suspension of work in productive
enterprises or in the interest of national security; (6) to regulate the normal hours of work for wage-earning and salaried
employees in industrial or business undertakings of all kinds; (7) to insure an even distribution of labor among the productive
enterprises; (8) to commandership and other means of transportation in order to maintain, as much as possible, adequate and
continued transportation facilities; (9) to requisition and take over any public service or enterprise for use or operation by the
Government;(10) to regulate rents and the prices of articles or commodities of prime necessity, both imported and locally
produced or manufactured; and (11) to prevent, locally or generally, scarcity, monopolization, hoarding injurious speculations,
and private control affecting the supply, distribution and movement of foods, clothing, fuel, fertilizer, chemical, building,
material, implements, machinery, and equipment required in agriculture and industry, with power to requisition these
commodities subject to the payment of just compensation. (As amended by Com. Act No. 620.)

SEC. 2. For the purpose of administering this Act and carrying out its objective, the President may designate any officer,
without additional compensation, or any department, bureau, office, or instrumentality of the National Government.

SEC. 3. Any person, firm, or corporation found guilty of the violation of any provision of this Act or of this Act or any of the rules
or regulations promulgated by the President under the authority of section one of this Act shall be punished by imprisonment of
not more than ten years or by a fine of not more than ten thousand pesos, or by both. If such violation is committed by a firm or
corporation, the manager, managing director, or person charge with the management of the business of such firm, or
corporation shall be criminally responsible therefor.

SEC. 4. The President shall report to the national Assembly within the first ten days from the date of the opening of its next
regular session whatever action has been taken by him under the authority herein granted.

SEC. 5. To carry out the purposed of this Act, the President is authorized to spend such amounts as may be necessary from
the sum appropriated under section five Commonwealth Act Numbered four hundred and ninety-eight.

SEC. 6. If any province of this Act shall be declared by any court of competent jurisdiction to be unconstitutional and void, such
declaration shall not invalidate the remainder of this Act.

SEC. 7. This Act shall take upon its approval.

Approved, August 19, 1940.

COMMONWEALTH ACT NO. 671

AN ACT DECLARING A STATE OF TOTAL EMERGENCY AS A RESULT OF WAR INVOLVING THE PHILIPPINES
AND AUTHORIZING THE PRESIDENT TO PROMULGATE RULE AND REGULATIONS TO MEET SUCH
EMERGENCY.

Be it enacted the National Assembly of the Philippines;

SECTION 1. The existed of war between the United State and other countries of Europe and Asia, which involves the
Philippines, makes it necessary to invest the President with extraordinary powers in order to meet the resulting emergency.

SEC. 2. Pursuant to the provision of Article VI, section 16, of the Constitution, the President is hereby authorized, during the
existence of the emergency, to promulgate such rules and regulation as he may deem necessary to carry out the national
policy declared in section 1 hereof. Accordingly, he is, among other things, empowered (a) to transfer the seat of the
Government or any of its subdivisions, branches, department, offices, agencies or instrumentalities; (b) to reorganize the
Government of the Commonwealth including the determination of the order of precedence of the heads of the Executive
Department; (c) to create new subdivision, branches, departments, offices, agency or instrumentalities of government and to
abolish any of those already existing; (d) to continue in force laws and appropriation which would lapse or otherwise became
inoperative, and to modify or suspend the operation or application of those of an administrative character; (e) to imposed new
taxes or to increase, reduce, suspend, or abolish those in existence; (f) to raise funds through the issuance of bonds or
otherwise, and to authorize the expensive of the proceeds thereof; (g) to authorize the National, provincial, city or municipal
governments to incur in overdrafts for purposes that he may approve; (h) to declare the suspension of the collection of credits
or the payment of debts; and (i) to exercise such other power as he may deem necessary to enable the Government to fulfill its
responsibilities and to maintain and enforce its authority.
 SEC. 3. The President of the Philippines report thereto all the rules and regulation promulgated by him under the power herein
granted.

SEC. 4. This Act shall take effect upon its approval and the rules and regulations. promulgated hereunder shall be in force and
effect until the Congress of the Philippines shall otherwise provide.

Approved December 16, 1941.

The above Acts cannot validly be invoked, Executive Order No. 68 was issued on July 29, 1947. Said Acts had elapsed upon the
liberation of the Philippines form the Japanese forces or, at the latest, when the surrender of Japan was signed in Tokyo on September
2, 1945.

When both Acts were enacted by the Second National Assembly, we happened to have taken direct part in their consideration and
passage, not only as one of the members of said legislative body as chairman of the Committee on Third Reading population Known as
the "Little Senate." We are, therefore in a position to state that said measures were enacted by the second national Assembly for the
purpose of facing the emergency of impending war and of the Pacific War that finally broke out with the attack of Pearl Harbor on
December 7, 1941. We approved said extraordinary measures, by which under the exceptional circumstances then prevailing
legislative power were delegated to the President of the Philippines, by virtue of the following provisions of the Constitution:

In time of war or other national emergency, the Congress may by law authorize the President, for a limited period and subject
to such restrictions as it may prescribe to promulgate rules and regulations to carry out declared national policy. (Article VI,
section 26.)

It has never been the purpose of the National Assembly to extend the delegation beyond the emergency created by the war as to
extend it farther would be violative of the express provision of the Constitution. We are of the opinion that there is no doubt on this
question.; but if there could still be any the same should be resolved in favor of the presumption that the National Assembly did not
intend to violate the fundamental law.

The absurdity of the contention that the emergency Acts continued in effect even after the surrender of Japan can not be gainsaid. Only
a few months after liberation and even before the surrender of Japan, or since the middle of 1945, the Congress started to function
normally. In the hypothesis that the contention can prevail, then, since 1945, that is, four years ago, even after the Commonwealth was
already replaced by the Republic of the Philippines with the proclamation of our Independence, two district, separate and independence
legislative organs, — Congress and the President of the Philippines — would have been and would continue enacting laws, the former
to enact laws of every nature including those of emergency character, and the latter to enact laws, in the form of executive orders,
under the so-called emergency powers. The situation would be pregnant with dangers to peace and order to the rights and liberties of
the people and to Philippines democracy.

Should there be any disagreement between Congress and the President of the Philippines, a possibility that no one can dispute the
President of the Philippines may take advantage of he long recess of Congress (two-thirds of every year ) to repeal and overrule
legislative enactments of Congress, and may set up a veritable system of dictatorship, absolutely repugnant to the letter and spirit of the
Constitution.

Executive Order No. 68 is equally offensive to the Constitution because it violates the fundamental guarantees of the due process and
equal protection of the law. It is especially so, because it permit the admission of many kinds evidence by which no innocent person can
afford to get acquittal and by which it is impossible to determine whether an accused is guilty or not beyond all reasonable doubt.

The rules of evidence adopted in Executive Order No. 68 are a reproduction of the regulation governing the trial of twelve criminal,
issued by General Douglas Mac Arthur, Commander in Chief of the United State Armed Forces in Western Pacific, for the purpose of
trying among other, General Yamashita and Homma. What we said in our concurring and dissenting opinion to the decision
promulgated on December 19, 1945, in the Yamashita case, L-129, and in our concurring and dissenting opinion to the resolution of
January 23, 1946 in disposing the Homma case, L-244, are perfectly applicable to the offensive rules of evidence in Executive Order
No. 68. Said rules of evidence are repugnant to conscience as under them no justice can expected.

For all the foregoing, conformably with our position in the Yamashita and Homma cases, we vote to declare Executive Order No. 68 null
and void and to grant petition
 United States Supreme Court
THE PAQUETE HABANA, (1900)
No. 395
Argued: November 7-8, 1899
Decided: January 8, 1900

[175 U.S. 677, 678] Mr J. Parker Kirlin for appellants.

Assistant Attorney General Hoyt, Solicitor General Richards, and Messrs. Joseph K. McCammon, James H. Hayden, George A. King,
and William B. King for appellees.

Under the Act of Congress of March 3, 1891, c. 517, this Court has jurisdiction of appeals from all final sentences and decrees in prize
causes, without regard to the amount in dispute and without any certificate of the district judge as to the importance of the particular
case.

International law is part of our law, and must be ascertained and administered by the courts of justice of appropriate jurisdiction as often
as questions of right depending upon it are duly presented for their determination. For this purpose, where there is no treaty and no
controlling executive or legislative act or judicial decision, resort must be had to the customs and usages of civilized nations, and, as
evidence of these, to the works of jurists and commentators, not for the speculations of their authors concerning what the law ought to
be, but for trustworthy evidence of what the law really is.

At the present day, by the general consent of the civilized nations of the world and independently of any express treaty or other public
act, it is an established rule of international law that coast fishing vessels, with their implements and supplies, cargoes and crews,
unarmed and honestly pursuing their peaceful calling of catching and bringing in fresh fish, are exempt from capture as prize of war.
And this rule is one which prize courts, administering the law of nations, are bound to take judicial notice of, and to give effect to, in the
absence of any treaty or other public act of their own government in relation to the matter.

At the breaking out of the recent war with Spain, two fishing smacks -- the one a sloop, 43 feet long on the keel and of 25 tons burden,
and with a crew of three men, and the other a schooner, 51 feet long on the keel and of 35 tons burden, and with a crew of six men --
were regularly engaged in fishing on the coast of Cuba, sailing under the Spanish flag, and each owned by a Spanish subject, residing
in Havana; her crew, who also resided there, had no interest in the vessel, but were entitled to shares, amounting in all to two thirds, of
her catch, the other third belonging to her owner, and her cargo consisted of fresh fish, caught by her crew from the sea, put on board
as they were caught, and kept and sold alive. Each vessel left Havana on a coast fishing voyage, and sailed along the coast of Cuba
about two hundred miles to the west end of the island; the sloop there fished for twenty-five days in the territorial waters of Spain, and
the schooner extended her fishing trip a hundred miles farther across the Yucatan Channel, and fished for eight days on the coast of
Yucatan. On her return, with her cargo of live fish, along the coast of Cuba, and when near Havana, each was captured by one of the
United States blockading squadron. Neither fishing vessel had any arms or ammunition on board, had any knowledge of the blockade,
or even of the war, until she was stopped by a blockading vessel, made any attempt to run the blockade, or any resistance at the time
of her capture, nor was there any evidence that she, or her crew, was likely to aid the enemy. Held that both captures were unlawful,
and without probable cause.

The cases are stated in the opinion of the Court.

Mr. Justice Gray delivered the opinion of the court:

These are two appeals from decrees of the district court of the United States for the southern district of Florida condemning two fishing
vessels and their cargoes as prize of war.

Each vessel was a fishing smack, running in and out of Havana, and regularly engaged in fishing on the coast of Cuba; sailed under the
Spanish flag; was owned by a Spanish subject of Cuban birth, living in the city of Havana; was commanded by a subject of Spain, also
residing in Havana; and her master and crew had no interest in the vessel, but were entitled to shares, amounting in all to two thirds, of
her catch, the other third belonging to her owner. Her cargo consisted of fresh fish, caught by her crew from the sea, put on board as
they were caught, and kept and sold alive. Until stopped by the blockading squadron she had no knowledge of the existence of the war
or of any blockade. She had no arms or ammunition on board, and made on attempt to run the blockade after she knew of its existence,
nor any resistance at the time of the capture.

The Paquete Habana was a sloop, 43 feet long on the keel, [175 U.S. 677, 679] and of 25 tons burden, and had a crew of three
Cubans, including the master, who had a fishing license from the Spanish government, and no other commission or license. She left
Havana March 25, 1898; sailed along the coast of Cuba to Cape San Antonio, at the western end of the island, and there fished for
twenty-five days, lying between the reefs off the cape, within the territorial waters of Spain; and then started back for Havana, with a
cargo of about 40 quintals of live fish. On April 25, 1898, about 2 miles off Mariel, and 11 miles from Havana, she was captured by the
United States gunboat Castine.
The Lola was a schooner, 51 feet long on the keel, and of 35 tons burden, and had a crew of six Cubans, including the master, and no
commission or license. She left Havana April 11, 1898, and proceeded to Campeachy sound, off Yucatan, fished there eight days, and
started back for Havana with a cargo of about 10,000 pounds of live fish. On April 26, 1898, near Havana, she was stopped by the
United States steamship Cincinnati, and was warned not to go into Havana, but was told that she would be allowed to land at Bahia
Honda. She then changed her course, and putfor Bahia Honda, but on the next morning, when near that port, was captured by the
United States steamship Dolphin.

Both the fishing vessels were brought by their captors into Key West. A libel for the condemnation of each vessel and her cargo as
prize of war was there filed on April 27, 1898; a claim was interposed by her master on behalf of himself and the other members of the
crew, and of her owner; evidence was taken, showing the facts above stated; and on May 30, 1898, a final decree of condemnation and
sale was entered, 'the court not being satisfied that as a matter of law, without any ordinance, treaty, or proclamation, fishing vessels of
this class are exempt from seizure.'

Each vessel was thereupon sold by auction; the Paquete Habana for the sum of $490; and the Lola for the sum of $800. There was no
other evidence in the record of the value of either vessel or of her cargo.

It has been suggested, in behalf of the United States, that [175 U.S. 677, 680] this court has no jurisdiction to hear and determine
these appeals, because the matter in dispute in either case does not exceed the sum or value of $2,000, and the district judge has not
certified that the adjudication involves a question of general importance.

The suggestion is founded on 695 of the Revised Statutes, which provides that 'an appeal shall be allowed to the Supreme Court from
all final decrees of any district court in prize causes, where the matter in dispute, exclusive of costs, exceeds the sum or value of two
thousand dollars; and shall be allowed, without reference to the value of the matter in dispute, on the certificate of the district judge that
the adjudication involves a question of general importance.'

The judiciary acts of the United States, for a century after the organization of the government under the Constitution, did impose
pecuniary limits upon appellate jurisdiction.

In actions at law and suits in equity the pecuniary limit of the appellate jurisdiction of this court from the circuit courts of the United
States was for a long time fixed at $2000. Acts of September 24, 1789, chap. 20, 22; 1 Stat. at L. 84; March 3, 1803, chap. 40; 2 Stat.
at L. 244; Gordon v. Ogden, 3 Pet. 33, 7 L. ed. 592; Rev. Stat. 691, 692. In 1875 it was raised to $5,000. Act of February 16, 1875,
chap. 77, 3; 18 Stat. at L. 316. And in 1889 this was modified by providing that, where the judgment or decree did not exceed the sum
of $5,000, this court should have appellate jurisdiction upon the question of the jurisdiction of the circuit court, and upon that question
only. Act of February 25, 1889, chap. 236, 1; 25 Stat. at L. 693; Parker v. Ormsby, 141 U.S. 81 , 35 L. ed. 654, 11 Sup. Ct. Rep. 912.

As to cases of admiralty and maritime jurisdiction, including prize causes, the judiciary act of 1789, in 9, vested the original jurisdiction
in the district courts, without regard to the sum or value in controversy; and in 21 permitted an appeal from them to the circuit courts
where the matter in dispute exceeded the sum or value of $300. 1 Stat. at L. 77, 83, chap. 20; The Betsey, 3 Dall. 6, 16, sub nom.
Glass v. The Betsey, 1 L. ed. 485, 489; The Amiable Nancy, 3 Wheat. 546, 4 L. ed. 456; Stratton v. Jarvis, 8 Pet. 44, 11, 8 L. ed. 846,
849. By the act of March 3, 1803, chap. 40, appeals to the circuit court were permitted from all final decrees of a district court
where [175 U.S. 677, 681] the matter in dispute exceeded the sum or value of $50; and from the circuit courts to this court in all cases
'of admiralty and maritime jurisdiction, and of prize or no prize' in which the matter in dispute exceeded the sum or value of $2,000. 2
Stat. at L. 244; Jenks v. Lewis, 3 Mason, 503, Fed. Cas. No. 7,279; Stratton v. Jarvis, above cited; The Admiral, 3 Wall. 603, 612, sub
nom. The Admiral v. United States, 18 L. ed. 58, 59. The acts of March 3, 1863, chap. 86, 7, and June 30, 1864, chap. 174, 13,
provided that appeals from the district courts in prize causes should lie directly to this court, where the amount in controversy exceeded
$2,000, or 'on the certificate of the district judge that the adjudication involves a question of difficulty and general importance.' 12 Stat.
at L. 760; 13 Stat. at L. 310. The provision of the act of 1803, omitting the words 'and of prize or no prize,' was re-enacted in 692 of the
Revised Statutes; and the provision of the act of 1864, concerning prize causes, was substantially re-enacted in 695 of the Revised
Statutes, already quoted.

But all this has been changed by the act of March 3, 1891, chap. 517, establishing the circuit courts of appeals, and creating a new and
complete scheme of appellate jurisdiction, depending upon the nature of the different cases, rater than upon the pecuniary amount
involved. 26 Stat. at L. 826.

By that act, as this court has declared, the entire appellate jurisdiction from the circuit and district courts of the United States was
distributed, 'according to the scheme of the act,' between this court and the circuit courts of appeals thereby established, 'by
designating the classes of cases' of which each of these courts was to have final jurisdiction. McLish v. Roff, 141 U.S. 661, 666 , 35 S.
L. ed. 893, 894, 12 Sup. Ct. Rep. 118; American Constr. Co. v. Jacksonville, T. & K. W. R. Co. 148 U.S. 372, 382 , 37 S. L. ed. 486,
490, 13 Sup. Ct. Rep. 758; Carey v. Houston & T. C. R. Co. 150 U.S. 170, 179 , 37 S. L. ed. 1041, 1043, 14 Sup. Ct. Rep. 63.

The intention of Congress, by the act of 1891, to make the nature of the case, and not the amount in dispute, the test of the appellate
jurisdiction of this court from the district and circuit courts, clearly appears upon examination of the leading provisions of the act.

Section 4 provides that no appeal, whether by writ of error or otherwise, shall hereafter be taken from a district court [175 U.S. 677,
682] to a circuit court; but that all appeals, by writ of error or otherwise, from the district courts, 'shall only be subject to review' in this
court or in the circuit court of appeal 'as is hereinafter provided,' and 'the review by appeal, by writ of error, or otherwise' from the circuit
courts, 'shall be had only' in this court or in the circuit court of appeals, 'according to the provisions of this act regulating the same.'
Section 5 provides that 'appeals or writs of error may be taken from the district courts, or from the existing circuit courts, direct to the
Supreme Court, in the following cases:'

First. 'In any case in which the jurisdiction of the court is in issue; in such cases the question of jurisdiction alone shall be certified to the
Supreme Court from the court below for decision.' This clause includes 'any case,' without regard to amount, in which the jurisdiction of
the court below is in issue; and differs in this respect from the act of 1889, above cited.

Second. 'From the final sentences and decrees in prize causes.' This clause includes the whole class of 'the final sentences and
decrees in prize causes,' and omits all provisions of former acts regarding amount in controversy, or certificate of a district judge.

Third. 'In cases of conviction of a capital or otherwise infamous crime.' This clause looks to the nature of the crime, and not to the extent
of the punishment actually imposed. A crime which might have been punished by imprisonment in a penitentiary is an infamous crime,
even if the sentence actually pronounced is of a small fine only. Ex parte Wilson, 114 U.S. 417, 426 , 29 S. L. ed. 89, 92, 5 Sup. Ct.
Rep. 935. Consequently, such a sentence for such a crime was subject to the appellate jurisdiction of this court, under this clause, until
this jurisdiction, so far as regards infamous crimes, was transferred to the circuit court of appeals by the act of January 20, 1897, chap.
68. 29 Stat. at L. 492.

Fourth. 'In any case that involves the construction or application of the Constitution of the United States.'

Fifth. 'In any case in which the constitutionality of any law of the United States, or the validity or construction of any treaty made under
its authority, is drawn in question.' [175 U.S. 677, 683] Sixth. 'In any case in which the Constitution or law of a state is claimed to be in
contravention of the Constitution of the United States.'

Each of these last three clauses, again, includes 'any case' of the class mentioned. They all relate to what are commonly called Federal
questions, and cannot reasonably be construed to have intended that the appellate jurisdiction of this court over such questions should
be restricted by any pecuniary limit,-especially in their connection with the succeeding sentence of the same section: 'Nothing in this act
shall affect the jurisdiction of the Supreme Court in cases appealed from the highest court of a state, nor the construction of the statute
providing for review of such cases.' Writs of error from this court to review the judgments of the highest court of a state upon such
questions have never been subject to any pecuniary limit. Act of September 24, 1789, chap. 20, 25; 1 Stat. at L. 85; Buel v. Van Ness,
8 Wheat. 312, 5 L. ed. 624; Act of February 5, 1867, chap. 28, 2; 14 Stat. at L. 386; Rev. Stat. 709.

By 6 of the act of 1891 this court is relieved of much of the appellate jurisdiction that it had before; the appellate jurisdiction from the
district and circuit courts 'in all cases other than those provided for in the preceding section of this act, unless otherwise provided by
law,' is vested in the circuit court of appeals; and its decisions in admiralty cases, as well as in cases arising under the cirminal laws,
and in certain other classes of cases, are made final, except that that court may certify to this court questions of law, and that this court
may order up the whole case by writ of certiorari. It is settled that the words 'unless otherwise provided by law,' in this section, refer only
to provisions of the same act, or of contemporaneous or subsequent acts, and do not include provisions of earlier statutes. Lau Ow Bew
v. United States, 144 U.S. 47, 57 , 36 S. L. ed. 340, 343, 12 Sup. Ct. Rep. 517; Hubbard v. Soby, 146 U.S. 56 , 36 L. ed. 886, 13 Sup.
Ct. Rep. 13; American Constr. Co. v. Jacksonville, T. & K. W. R. Co. 148 U.S. 372, 383 , 37 S. L. ed. 486, 491, 13 Sup. Ct. Rep. 758.

The act of 1891 nowhere imposes a pecuniary limit upon the appellate jurisdiction, either of this court or of the circuit court of appeals,
from a district or circuit court of the United States. The only pecuniary limit imposed is one of [175 U.S. 677, 684] $1,000 upon the
appeal to this court of a case which has been once decided on appeal in the circuit court of appeals, and in which the judgment of that
court is not made final by 6 of the act.

Section 14 of the act of 1891, after specifically repealing 691 of the Revised Statutes and 3 of the act of February 16, 1875, further
provides that 'all acts and parts of acts relating to appeals or writs of error, inconsistent with the provisions for review by appeals or writs
of error in the preceding 5 and 6 of this act, are hereby repealed.' 26 Stat. at L. 829, 830. The object of the specific repeal, as this court
has declared, was to get rid of the pecuniary limit in the acts referred to. McLish v. Roff, 141 U.S. 661, 667 , 35 S. L. ed. 893, 895, 12
Sup. Ct. Rep. 118. And, although neither 692 nor 695, of the Revised Statutes is repealed by name, yet, taking into consideration the
general repealing clause, together with the affirmative provisions of the act, the case comes within the reason of the decision in an
analogous case, in which this court said: 'The provisions relating to the subject-matter under consideration are, however, so
comprehensive, as well as so variant from those of former acts, that we think the intention to substitute the one for the other is
necessarily to be inferred, and must prevail.' Fisk v. Henarie, 142 U.S. 459, 468 , 35 S. L. ed. 1079, 1083, 12 Sup. Ct. Rep. 207.

The decision in this court in the recent case of United States v. Rider, 163 U.S. 132 , 41 L. ed. 101, 16 Sup. Ct. Rep. 983, affords an
important, if not controlling, precedent. From the beginning of this century until the passage of the act of 1891, both in civil and in
criminal cases, questions of law upon which two judges of the circuit court were divided in opinion might be certified by them to this
court for decision. Act of April 29, 1802, chap. 31, 6; 2 Stat. at L. 159; June 1, 1872, chap. 255, 1; 17 Stat. at L. 196; Rev. Stat. 650-
652, 693, 697; New England M. Ins. Co. v. Dunham, 11 Wall. 1, 21, 20 L. ed. 90, 96; United States v. Sanges, 144 U.S. 310, 320 , 36
S. L. ed. 445, 449, 12 Sup. Ct. Rep. 609. But in United States v. Rider it was adjudged by this court that the act of 1891 had
superseded and repealed the earlier acts authorizing questions of law to be certified from the circuit court to this court; and the grounds
of that adjudication sufficiently appear by [175 U.S. 677, 685] the statement of the effect of the act of 1891 in two passages of that
opinion: 'Appellate jurisdiction was given in all criminal cases by writ of error either from this court or from the circuit courts of appeals,
and in all civil cases by appeal or error, without regard to the amount in controversy, except as to appeals or writs of error to or from the
circuit courts of appeals in cases not made final as specified in 6.' 'It is true that repeals by implication are not favored, but we cannot
escape the conclusion that, tested by its scope, its obvious purpose, and its terms, the act of March 3, 1891, covers the whole subject-
matter under consideration, and furnishes the exclusive rule in respect of appellate jurisdiction on appeal, writ of error, or
certificate.' 163 U.S. 138 -140, 41 L. ed. 104, 16 Sup. Ct. Rep. 986.

That judgment was thus rested upon two successive propositions: First, that the act of 1891 gives appellate jurisdiction, either to this
court or to the circuit court of appeals, in all criminal cases, and in all civil cases 'without regard to the amount in controversy;' second,
that the act, by its terms, its scope, and its obvious purpose, 'furnishes the exclusive rule in respect of appellate jurisdiction on appeal,
writ of error, or certificate.'

As was long ago said by Chief Justice Marshall, 'the spirit as well as the letter of a statute must be respected, and where the whole
context of the law demonstrates a particular intent in the legislature to effect a certain object, some degree of implication may be called
in to aid that intent.' Durousseau v. United States, 6 Cranch, 307, 314, 3 L. ed. 232, 234. And it is a well-settled rule in the construction
of statutes, often affirmed and applied by this court, that, 'even where two acts are not in express terms repugnant, yet if the latter act
covers the whole subject of the first, and embraces new provisions, plainly showing that it was intended as a substitute for the first act,
it will operate as a repeal of that act.' United States v. Tynen, 11 Wall. 88, 92, 20 L. ed. 153, 154; King v. Cornell, 106 U.S. 395, 396 ,
27 S. L. ed. 60, 1 Sup. Ct. Rep. 312; Tracy v. Tuffly, 134 U.S. 206, 223 , 33 S. L. ed. 879, 884, 10 Sup. Ct. Rep. 527; Fisk v.
Henarie, 142 U.S. 459, 468 , 35 S. L. ed. 1079, 1083, 12 Sup. Ct. Rep. 207; District of Columbia v. Hutton, 143 U.S. 18, 27 , 36 S. L.
ed. 60, 62, 12 Sup. Ct. Rep. 369; United States v. Healey, 160 U.S. 136, 147 , 40 S. L. ed. 369, 373, 16 Sup. Ct. Rep. 247.

We are of opinion that the act of 1891, upon its face, read [175 U.S. 677, 686] in the light of settled rules of statutory construction and
of the decisions of this court, clearly manifests the intention of Congress to cover the whole subject of the appellate jurisdiction from the
district and circuit courts of the United States, so far as regards in what cases, as well as to what courts, appeals may be taken, and to
supersede and repeal, to this extent, all the provisions of earlier acts of Congress, including those that imposed pecuniary limits upon
such jurisdiction, and, as part of the new scheme, to confer upon this court jurisdiction of appeals from all final sentences and decrees
in prize causes, without regard to the amount in dispute, and without any certificate of the district judge as to the importance of the
particular case.

We are then brought to the consideration of the question whether, upon the facts appearing in these records, the fishing smacks were
subject to capture by the armed vessels of the United States during the recent war with Spain.

By an ancient usage among civilized nations, beginning centuries ago, and gradually ripening into a rule of international law, coast
fishing vessels, pursuing their vocation of catching and bringing in fresh fish, have been recognized as exempt, with their cargoes and
crews, from capture as prize of war.

This doctrine, however, has been earnestly contested at the bar; and no complete collection of the instances illustrating it is to be found,
so far as we are aware, in a single published work although many are referred to and discussed by the writers on international law,
notable in 2 Ortolan, Regles Internationales et Diplomatie de la Mer (4th ed.) lib. 3, chap. 2, pp. 51-56; in 4 Calvo, Droit International
(5th ed.) 2367-2373; in De Boeck, Propriete Privee Ennemie sous Pavillon Ennemi, 191-196; and in Hall, International Law (4th ed.)
148. It is therefore worth the while to trace the history of the rule, from the earliest accessible sources, through the increasing
recognition of it, with occasional setbacks, to what we may now justly consider as its final establishment in our own country and
generally throughout the civilized world.

The earliest acts of any government on the subject, men- [175 U.S. 677, 687] tioned in the books, either emanated from, or were
approved by, a King of England.

In 1403 and 1406 Henry IV. issued orders to his admirals and other officers, entitled 'Concerning Safety for Fishermen-De Securitate
pro Piscatoribus.' By an order of October 26, 1403, reciting that it was made pursuant to a treaty between himself and the King of
France; and for the greater safety of the fishermen of either country, and so that they could be, and carry on their industry, the more
safely on the sea, and deal with each other in peace; and that the French King had consented that English fishermen should be treated
likewise,-it was ordained that French fishermen might, during the then pending season for the herring fishery, safely fish for herrings
and all other fish, from the harbor of Gravelines and the island of Thanet to the mouth of the Seine and the harbor of Hautoune. And by
an order of October 5, 1406, he took into his safe conduct and under his special protection, guardianship, and defense, all and singular
the fishermen of France, Flanders, and Brittany, with their fishing vessels and boats, everywhere on the sea, through and within his
dominions, jurisdictions, and territories, in regard to their fishery, while sailing, coming, and going, and, at their pleasure, freely and
lawfully fishing, delaying, or proceeding, and returning homeward with their catch of fish, without any molestation or hindrance
whatever; and also their fish, nets, and other property and goods soever; and it was therefore ordered that such fishermen should not
be interfered with, provided they should comport themselves well and properly, and should not, by color of these presents, do or
attempt, or presume to do or attempt, anything that could prejudice the King, or his Kingdom of England, or his subjects. 8 Rymer's
Foedera, 336, 451.

The treaty made October 2, 1521, between the Emperor Charles V. and Francis I. of France, through their ambassadors, recited that a
great and fierce war had arisen between them, because of which there had been, both by land and by sea, frequent depredations and
incursions on either side, to the grave detriment and intolerable injury of the innocent [175 U.S. 677, 688] subjects of each; and that a
suitable time for the herring fishery was at hand, and, by reason of the sea being beset by the enemy, the fishermen did not dare to go
out, whereby the subject of their industry, bestowed by heaven to allay the hunger of the poor, whould wholly fail for the year, unless it
were otherwise provided,-Quo fit, ut piscaturoe commoditas, ad pauperum levandam famen a coelesti numine concessa, cessare hoc
anno cmnino debeat, nisi aliter provideatur. And it was therefore agreed that the subjects of each sovereign, fishing in the sea, or
exercising the calling of fishermen, could and might, until the end of the next January, without incurring any attack, depredation,
molestation, trouble, or hindrance soever, safely and freely, everywhere in the sea, take herrings and every other kind of fish, the
existing war by land and sea notwithstanding; and, further, that during the time aforesaid no subject of either sovereign should commit,
or attempt or presume to commit, any depredation, force, violence, molestation, or vexation to or upon such fishermen or their vessels,
supplies, equipments, nets, and fish, or other goods soever truly appeartaining to fishing. The treaty was made at Calais, then an
English possession. It recites that the ambassadors of the two sovereigns met there at the earnest request of Henry VIII. and with his
countenance, and in the presence of Cardinal Wolsey, his chancellor and representative. And towards the end of the treaty it is agreed
that the said King and his said representative, 'by whose means the treaty stands concluded, shall be conservators of the agreements
therein, as if thereto by both parties elected and chosen.' 4 Dumont, Corps Diplomatique, pt. 1, pp. 352, 353.

The herring fishery was permitted, in time of war, by French and Dutch edicts in 1536. Bynkershoek, Quaestiones Juris Publicae, lib. 1,
chap. 3; 1 Emerigon des Assurances, chap. 4, 9; chap. 12, 19, 8.

France, from remote times, set the example of alleviating the evils of war in favor of all coast fishermen. In the compilation entitled 'Us
et Coutumes de la Mer,' published by Cleirac in 1661, and in the third part thereof, containing 'Maritime or Admiralty Jurisdiction,-la
Jurisdiction de la [175 U.S. 677, 689] Marine ou d' Admiraute-as well in time of peace, as in time of war,' article 80 is as follows: 'The
admiral may in time of war accord fishing truces-tresves pescheresses-to the enemy and to his subjects; provided that the enemy will
likewise accord them to Frenchmen.' Cleirac, 544. Under this article, reference is made to articles 49 and 79 respectively of the French
ordinances concerning the admiralty in 1543 and 1584, of which it is but a reproduction. 4 Pardessus, Collection de Lois Maritimes,
319; 2 Ortolan, 51. And Cleirac adds, in a note, this quotation from Froissart's Chronicles: 'Fishermen on the sea, whatever war there
were in France and England, never did harm to one another; so they are friends, and help one another at need,-Pescheurs sur mer,
quelque guerre qui soit en France et Angleterre, jamais ne se firent mal l'un a l'autre; aincois sont amis, et s'aydent l'un a l'autre au
besoin.'

The same custom would seem to have prevailed in France until towards the end of the seventeenth century. For example, in 1675,
Louis XIV. and the States General of Holland by mutual agreement granted to Dutch and French fishermen the liberty, undisturbed by
their vessels of war, of fishing along the coats of France, Holland, and England. D'Hauterive et De Cussy, Traites de Commerce, pt. 1,
vol. 2, p. 278. But by the ordinances of 1681 and 1692 the practice was discontinued, because, Valin says, of the faithless conduct of
the enemies of France, who, abusing the good faith with which she had always observed the treaties, habitually carried off her
fishermen, while their own fished in safety. 2 Valin sur l'Ordonnance de la Marine (1776) 689, 690; 2 Ortolan, 52; De Boeck, 192.

The doctrine which exempts coast fishermen, with their vessels and cargoes, from capture as prize of war, has been familiar to the
United States from the time of the War of Independence.

On June 5, 1779, Louis XVI., our ally in that war, addressed a letter to his admiral, informing him that the wish he had always had of
alleviating, as far as he could, the hardships of war, had directed his attention to that class of his subjects [175 U.S. 677, 690] which
devoted itself to the trade of fishing, and had no other means of livelihood; that he had thought that the example which he should give to
his enemies, and which could have no other source than the sentiments of humanity which inspired him, would determine them to allow
to fishermen the same facilities which he should consent to grant; and that he had therefore given orders to the commanders of all his
ships not to disturb English fishermen, nor to arrest their vessels laden with fresh fish, even if not caught by those vessels; provided
they had no offensive arms, and were not proved to have made any signals creating a suspicion of intelligence with the enemy; and the
admiral was directed to communicate the King's intentions to all officers under his control. By a royal order in council of November 6,
1780, the former orders were confirmed; and the capture and ransom, by a French cruiser, of The John and Sarah, an English vessel,
coming from Holland, laden with fresh fish, were pronounced to be illegal. 2 Code des Prises (ed. 1784) 721, 901, 903.

Among the standing orders made by Sir James Marriott, Judge of the English High Court of Admiralty, was one of April 11, 1780, by
which it was 'ordered that all causes of prize of fishing boats or vessels taken from the enemy may be consolidated in one monition,
and one sentence or interlocutory, if under 50 tons burthen, and not more than 6 in number.' Marriott's Formulary, 4. But by the
statements of his successor, and of both French and English writers, it apears that England, as well as France, during the American
Revolutionary War, abstained from interfering with the coast fisheries. The Young Jacob and Johanna, 1 C. Rob. 20; 2 Ortolan, 53;
Hall, 148.

In the treaty of 1785 between the United States and Prussia, article 23 (which was proposed by the American Commissioners, John
Adams, Benjamin Franklin, and Thomas Jefferson, and is said to have been drawn up by Franklin), provided that, if war should arise
between the contracting parties, 'all women and children, scholars of every faculty, cultivators of the earth, artisans, manufacturers, and
fishermen, [175 U.S. 677, 691] unarmed and inhabiting unfortified towns, villages, or places, and in general all others whose
occupations are for the common subsistence and benefit of mankind, shall be allowed to continue their respective employments, and
shall not be molested in their persons, nor shall their houses or goods be burnt or otherwise destroyed, nor their fields wasted by the
armed force of the enemy, into whose power, by the events of war, they may happen to fall; but if anything is necessary to be taken
from them for the use of such armed force, the same shall be paid for at a reasonable price.' 8 Stat. at L. 96; 1 Kent, Com. 91, note;
Wheaton, History of the Law of Nations, 306, 308. Here was the clearest exemption from hostile molestation or seizure of the persons,
occupations, houses, and goods of unarmed fishermen inhabiting unfortified places. The article was repeated in the later treaties
between the United States and Prussia of 1799 and 1828. 8 Stat. at L. 174, 384. And Dana, in a note to his edition of Wheaton's
International Laws, says: 'In many treaties and decrees, fishermen catching fish as an article of food are added to the class of persons
whose ocupation is not to be disturbed in war.' Wheaton, International Law (8th ed.) 345, note 168.

Since the United States became a nation, the only serious interruptions, so far as we are informed, of the general recognition of the
exemption of coast fishing vessels from hostile capture, arose out of the mutual suspicions and recriminations of England and France
during the wars of the French Revolution.
In the first years of those wars, England having authorized the capture of French fishermen, a decree of the French National
Convention of October 2, 1793, directed the executive power 'to protest against this conduct, theretofore without example; to reclaim
the fishing boats seized; and, in case of refusal, to resort to reprisals.' But in July, 1796, the Committee of Public Safety ordered the
release of English fishermen seized under the former decree, 'not considering them as prisoners of war.' La Nostra Segnora de la
Piedad (1801) cited below; 2 De Cussy, Droit Maritime, 164, 165; 1 Masse, Droit Commercial (2d ed.) 266, 267. [175 U.S. 677,
692] On January 24, 1798, the English government by express order instructed the commanders of its ships to seize French and
Dutch fishermen with their boats. 6 Martens, Recueil des Traites (2d ed.) 505; 6 Schoell, Histoire des Traites, 119; 2 Ortolan, 53. After
the promulgation of that order, Lord Stowell (then Sir William Scott) in the High Court of Admiralty of England condemned small Dutch
fishing vessels as prize of war. In one case the capture was in April, 1798, and the decree was made November 13, 1798. The Young
Jacob and Johanna, 1 C. Rob. 20. In another case the decree was made August 23, 1799. The Noydt Gedacht, 2 C. Rob. 137, note.

For the year 1800 the orders of the English and French governments and the correspondence between them may be found in books
already referred to. 6 Martens, 503-512; 6 Schoell, 118-120; 2 Ortolan, 53, 54. The doings for that year may be summed up as follows:
On March 27, 1800, the French government, unwilling to resort to reprisals, re-enacted the orders given by Louis XVI. in 1780, above
mentioned, prohibiting any seizure by the French ships of English fishermen, unless armed or proved to have made signals to the
enemy. On May 30, 1800, the English government, having received notice of that action of the French government, revoked its order of
January 24, 1798. But soon afterward the English government complained that French fishing boats had been made into fireboats at
Flushing, as well as that the French government had impressed and had sent to Brest, to serve in its flotilla, French fishermen and their
boats, even those whom the English had released on condition of their not serving; and on January 21, 1801, summarily revoked its last
order, and again put in force its order of January 24, 1798. On February 16, 1801, Napoleon Bonaparte, then First Consul, directed the
French commissioner at London to return at once to France, first declaring to the English government that its conduct, 'contrary to all
the usages of civilized nations, and to the common law which governs them, even in time of war, gave to the existing war a character of
rage and bitterness which destroyed even the relations usual in a loyal war,' [175 U.S. 677, 693] AND 'TENDED ONLY TO
EXASPERATE THE TWO nations, and to put off the term of peace;' and that the French government, having always made it 'a maxim
to alleviate as much as possible the evils of war, could not think, on its part, of rendering wretched fishermen victims of a prolongation
of hostilities, and would abstain from all reprisals.'

On March 16, 1801, the Addington Ministry, having come into power in England, revoked the orders of its predecessors against the
French fishermen; maintaining, however, that 'the freedom of fishing was nowise founded upon an agreement, but upon a simple
concession;' that 'this concession would be always subordinate to the convenience of the moment,' and that 'it was never extended to
the great fishery, or to commerce in oysters or in fish.' And the freedom of the coast fisheries was again allowed on both sides. 6
Martens, 514; 6 Schoell, 121; 2 Ortolan, 54; Manning, Law of Nations (Amos's ed.) 206.

Lord Stowell's judgment in The Young Jacob and Johanna, 1 C. Rob. 20, above cited, was much relied on by the counsel for the United
States, and deserves careful consideration.

The vessel there condemned is described in the report as 'a small Dutch fishing vessel taken April, 1798, on her return from the Dogger
bank to Holland;' and Lord Stowell, in delivering judgment, said: 'In former wars it has not been usual to make captures of these small
fishing vessels; but this rule was a rule of comity only, and not of legal decision; it has prevailed from views of mutual accommodation
between neighboring countries, and from tenderness to a poor and industrious order of people. In the present war there has, I presume,
been sufficient reason for changing this mode of treatment; and as they are brought before me for my judgment they must be referred
to the general principles of this court; they fall under the character and description of the last class of cases; that is, of ships constantly
and exclusively employed in the enemy's trade.' And he added: 'It is a further satisfaction to me, in giving this judgment, to observe that
the facts also bear strong marks of a false and fraudulent transaction.' [175 U.S. 677, 694] Both the capture and the condemnation
were within a year after the order of the English government of January 24, 1798, instructing the commanders of its ships to seize
French and Dutch fishing vessels, and before any revocation of that order. Lord Stowell's judgment shows that his decision was based
upon the order of 1798, as well as upon strong evidence of fraud. Nothing more was adjudged in the case.

But some expressions in his opinion have been given so much weight by English writers that it may be well to examine them
particularly. The opinion begins by admitting the known custom in former wars not to capture such vessels; adding, however, 'but this
was a rule of comity only, and not of legal decision.' Assuming the phrase 'legal decision' to have been there used, in the sense in
which courts are accustomed to use it, as equivalent to 'judicial decision,' it is true that, so far as appears, there had been no such
decision on the point in England. The word 'comity' was apparently used by Lord Stowell as synonymous with courtesy or goodwill. But
the period of a hundred years which has since elapsed is amply sufficient to have enabled what originally may have rested in custom or
comity, courtesy or concession, to grow, by the general assent of civilized nations, into a settled rule of international law. As well said by
Sir James Mackintosh: 'In the present century a slow and silent, but very substantial, mitigation has taken place in the practice of war;
and in proportion as that mitigated practice has received the sanction of time it is raised from the rank of mere usage, and becomes part
of the law of nations.' Discourse on the Law of Nations, 38; 1 Miscellaneous Works, 360.

The French prize tribunals, both before and after Lord Stowell's decision, took a wholly different view of the general question. In 1780,
as already mentioned, an order in council of Louis XVI. had declared illegal the capture by a French cruiser of The John and Sarah, an
English vessel coming from Holland, laden with fresh fish. And on May 17, 1801, where a Portuguese fishing vessel, with her cargo of
fish, having no more crew than was needed for her management and for serving the nets, on a trip of several days, had been capt- [175
U.S. 677, 695] ured in April, 1801, by a French cruiser, 3 leagues off the coast of Portugal, the Council of Prizes held that the capture
was contrary to 'the principles of humanity and the maxims of international law,' and decreed that the vessel, with the fish on board, or
the net proceeds of any that had been sold, should be restored to her master. La Nostra Segnora de la Piedad, 25 Merlin,
Jurisprudence, Prise Maritime, 3, arts. 1, 3; S. C. 1 Pistoye et Duverdy, Prises Maritimes, 331; 2 De Cussy, Droit Maritime, 166.
The English government, soon afterwards, more than once unqualifiedly prohibited the molestation of fishing vessels employed in
catching and bringing to market fresh fish. On May 23, 1806, it was 'ordered in council that all fishing vessels under Prussian and other
colors, and engaged for the purpose of catching fish and conveying them fresh to market, with their crews, cargoes, and stores, shall
not be molested on their fishing voyages and bringing the same to market; and that no fishing vessels of this description shall hereafter
be molested. And the Right Honorable the Lords Commissioners of His Majesty's Treasury, the Lords Commissioners of the Admiralty,
and the Judge of the High Court of Admiralty, are to give the necessary directions herein as to them may respectively appertain.' 5 C.
Rob. 408. Again, in the order in council of May 2, 1810, which directed that 'all vessels which shall have cleared out from any port so far
under the control of France or her allies as that British vessels may not freely trade thereat, and which are employed in the whale
fishery, or other fishery of any description, save as hereinafter excepted, and are returning, or destined to return either to the port from
whence they cleared, or to any other port or place at which the British flag may not freely trade, shall be captured and condemned
together with their stores and cargoes, as prize to the captors,' there were excepted 'vessels employed in catching and conveying fish
fresh to market, such vessels not being fitted or provided for the curing of fish.' Edw. Adm. appx. L.

Wheaton, in his Digest of the Law of Maritime Captures and Prizes, published in 1815, wrote: 'It has been usual [175 U.S. 677, 696] in
maritime wars to exempt from capture fishing boats and their cargoes, both from views of mutual accommodation between neighboring
countries, and from tenderness to a poor and industrious order of people. This custom, so honorable to the humanity of civilized
nations, has fallen into disuse; and it is remarkable that both France and England mutually reproach each other with that breach of
good faith which has finally abolished it.' Wheaton, Captures, chap. 2, 18.

This statement clearly exhibits Wheaton's opinion that the custom had been a general one, as well as that it ought to remain so. His
assumption that it had been abolished by the differences between France and England at the close of the last century was hardly
justified by the state of things when he wrote, and has not since been borne out.

During the wars of the French Empire, as both French and English writers agree, the coast fisheries were left in peace. 2 Ortolan, 54;
De Boeck, 193; Hall, 148. De Boeck quaintly and truly adds, 'and the incidents of 1800 and of 1801 had no morrow,-n'eurent pas de
lendemain.'

In the war with Mexico, in 1846, the United States recognized the exemption of coast fishing boats from capture. In proof of this,
counsel have referred to records of the Navy Department, which this court is clearly authorized to consult upon such a question. Jones
v. United States, 137 U.S. 202 , 34 L. ed. 691, 11 Sup. Ct. Rep. 80; Underhill v. Hernandez, 168 U.S. 250, 253 , 42 S. L. ed. 456, 457,
18 Sup. Ct. Rep. 83.

By those records it appears that Commodore Conner, commanding the Home Squadron blockading the east coast of Mexico, on May
14, 1846, wrote a letter from the ship Cumberland, off Brazos Santiago, near the southern point of Texas, to Mr. Bancroft, the Secretary
of the Navy, inclosing a copy of the commodore's 'instructions to the commanders of the vessels of the Home Squadron, showing the
principles to be observed in the blockade of the Mexican ports,' one of which was that 'Mexican boats engaged in fishing on any part of
the coast will be allowed to pursue their labors unmolested;' and that on June 10, 1846, those instructions were approved by the Navy
Department, of which Mr. Bancroft was still the head, and continued to be until he was appointed Minister to [175 U.S. 677,
697] England in September following. Although Commodore Conner's instructions and the Department's approval thereof do not
appear in any contemporary publication of the government, they evidently became generally known at the time, or soon after; for it is
stated in several treatises on international law (beginning with Ortolan's second edition, published in 1853) that the United States in the
Mexican war permitted the coast fishermen of the enemy to continue the free exercise of their industry. 2 Ortolan (2d ed.) 49, note; (4th
ed.) 55; 4 Calvo (5th ed.) 2372; De Boeck, 194; Hall (4th ed.) 148.

As qualifying the effect of those statements, the counsel for the United States relied on a proclamation of Commodore Stockton,
commanding the Pacific Squadron, dated August 20, 1846, directing officers under his command to proceed immediately to blockade
the ports of Mazatlan and San Blas, on the west coast of Mexico, and saying to them, 'All neutral vessels that you may find there you
will allow twenty days to depart; and you will make the blockade absolute against all vessels, except armed vessels of neutral nations.
You will capture all vessels under the Mexican flag that you may be able to take.' Navy Reports of 1846, pp. 673, 674. But there is
nothing to show that Commodore Stockton intended, or that the government approved, the capture of coast fishing vessels.

On the contrary, General Halleck, in the preface to his work on International Law, or Rules Regulating the Intercourse of States in
Peace and War, published in 1861, says that he began that work, during the war between the United States and Mexico, 'while serving
on the staff of the commander of the Pacific Squadron' and 'often required to give opinions on questions of international law growing out
of the operations of the war.' Had the practice of the blockading squadron on the west coast of Mexico during that war, in regard to
fishing vessels, differed from that approved by the Navy Department on the east coast, General Halleck could hardly have failed to
mention it, when stating the prevailing doctrine upon the subject as follows: [175 U.S. 677, 698] 'Fishing boats have also, as a general
rule, been exempted from the effects of hostilities. As early as 1521, while war was raging between Charles V. and Francis,
ambassadors from these two sovereigns met at Calais, then English, and agreed that, whereas the herring fishery was about to
commence, the subjects of both belligerents engaged in this pursuit should be safe and unmolested by the other party, and should have
leave to fish as in time of peace. In the war of 1800, the British and French governments issued formal instructions exempting the
fishing boats of each other's subjects from seizure. This order was subsequently rescinded by the British government, on the alleged
ground that some French fishing boats were equipped as gunboats, and that some French fishermen who had been prisoners in
England had violated their parole not to serve, and had gone to join the French fleet at Brest. Such excuses were evidently mere
pretexts; and after some angry discussions had taken place on the subject the British restriction was withdrawn, and the freedom of
fishing was again allowed on both sides. French writers consider this exemption as an established principle of the modern law of war,
and it has been so recognized in the French courts, which have restored such vessels when captured by French cruisers.' Halleck (1st
ed.) chap. 20, 23.
That edition was the only one sent out under the author's own auspices, except an abridgment, entitled 'Elements of International Law
and the Law of War,' which he published in 1866, as he said in the preface, to supply a suitable text-book for instruction upon the
subject, 'not only in our colleges, but also in our two great national schools,-the Military and Naval Academies.' In that abridgment the
statement as to fishing boats was condensed as follows: 'Fishing boats have also, as a general rule, been exempted from the effects of
hostilities. French writers consider this exemption as an established principle of the modern law of war, and it has been so recognized
in the French courts, which have restored such vessels when captured by French cruisers.' Halleck's Elements, chap. 20, 21.

In the treaty of peace between the United States and Mex- [175 U.S. 677, 699] ico, in 1848, were inserted the very words of the earlier
treaties with Prussia, already quoted, forbidding the hostile molestation or seizure in time of war of the persons, occupations, houses, or
goods of fishermen. 9 Stat. at L. 939, 940.

Wharton's Digest of the International Law of the United States, published by authority of Congress in 1886 and 1887, embodies
General Halleck's fuller statement, above quoted, and contains nothing else upon the subject. 3 Whart. Int. Law Dig. 345, p. 315; 2
Halleck (Eng. eds. 1873 and 1878) p. 151.

France in the Crimean war in 1854, and in her wars with Italy in 1859 and with Germany in 1870, by general orders, forbade her
cruisers to trouble the coast fisheries, or to seize any vessel or boat engaged therein, unless naval or military operations should make it
necessary. Calvo, 2372; Hall, 148; 2 Ortolan (4th ed.) 449; 10 Revue de Droit Interantional (1878) 399. Revne de Droit International
(1878) 399. her alliance with France and Italy, England did not follow the same line of conduct; and that her cruisers in the Sea of Azof
destroyed the fisheries, nets, fishing implements, provisions, boats, and even the cabins of inhabitants of the coast. Calvo, 2372. And a
Russian writer on prize law remarks that those depredations, 'having brought ruin on poor fishermen and inoffensive traders, could not
but leave a painful impression on the minds of the population, without impairing in the least the resources of the Russian government.'
Katchenovsky (Pratt's ed.) 148. But the contemporaneous reports of the English naval officers put a different face on the matter, by
stating that the destruction in question was part of a military measure, conducted with the co-operation of the French ships, and
pursuant to instructions of the English admiral 'to clear the seaboard of all fish stores, all fisheries and mills, on a scale beyond the
wants of the neighboring population, and indeed of all things destined to contribute to the maintenance of the enemy's army in the
Crimea;' and that the property destroyed consisted of large fishing establishments and storehouses of the Russian government,
numbers of heavy launches, and enormous quantities of nets and gear, salted fish, corn, [175 U.S. 677, 700] and other provisions
intended for the supply of the Russian army. United Service Journal of 1855, pt. 3, pp. 108-112.

Since the English orders in council of 1806 and 1810, before quoted, in favor of fishing vessels employed in catching and bringing to
market fresh fish, no instance has been found in which the exemption from capture of private coast fishing vessels honestly pursuing
their peaceful industry has been denied by England or by any other nation. And the Empire of Japan ( the last state admitted into the
rank of civilized nations), by an ordinance promulgated at the beginning of its war with China in August, 1894, established prize courts,
and ordained that 'the following enemy's vessels are exempt from detention,' including in the exemption 'boats engaged in coast
fisheries,' as well as 'ships engaged exclusively on a voyage of scientific discovery, philanthrophy, or religious mission.' Takahashi,
International Law, 11, 178.

International law is part of our law, and must be ascertained and administered by the courts of justice of appropriate jurisdiction as often
as questions of right depending upon it are duly presented for their determination. For this purpose, where there is no treaty and no
controlling executive or legislative act or judicial decision, resort must be had to the customs and usages of eivilized nations, and, as
evidence of these, to the works of jurists and commentators who by years of labor, research, and experience have made themselves
peculiarly well acquainted with the subjects of which they treat. Such works are resorted to by judicial tribunals, not for the speculations
of their authors concerning what the law ought to be, but for trustworthy evidence of what the law really is. Hilton v. Guyot, 159 U.S.
113, 163 , 164 S., 214, 215, 40 L. ed. 95, 108, 125, 126, 16 Sup. Ct. Rep. 139.

Wheaton places among the principal sourees international law 'text- writers of authority, showing what is the approved usage of
nations, or the general opinion respecting their mutual conduct, with the definitions and modifications introduced by general consent.'
As to these he forcibly observes: 'Without wishing to exaggerate the importance of these writers, or to substitute, in any case, their
authority for the principles of reason, it may be affirmed that they are gen- [175 U.S. 677, 701] erally impartial in their judgment. They
are witnesses of the sentiments and usages of civilized nations, and the weight of their testimony increases every time that their
authority is invoked by statesmen, and every year that passes without the rules laid down in their works being impugned by the avowal
of contrary principles.' Wheaton, International Law ( 8th ed.), 15.

Chancellor Kent says: 'In the absence of higher and more authoritative sanctions, the ordinances of foreign states, the opinions of
eminent statesmen, and the writings of distinguished jurists, are regarded as of great consideration on questions not settled by
conventional law. In cases where the principal jurists agree, the presumption will be very great in favor of the solidity of their maxims;
and no civilized nation that does not arrogantly set all ordinary law and justice at defiance will venture to disregard the uniform sense of
the established writers on international law.' 1 Kent, Com. 18.

It will be convenient, in the first place, to refer to some leading French treatises on international law, which deal with the question now
before us, not as one of the law of France only, but as one determined by the general consent of civilized nations.

'Enemy ships,' say Pistoye and Duverdy, in their Treatise on Maritime Prizes, published in 1855, 'are good prize. Not all, however; for it
results from the unanimous accord of the maritime powers that an exception should be made in favor of coast fishermen. Such
fishermen are respected by the enemy so long as they devote themselves exclusively to fishing.' 1 Pistoye et Duverdy, tit. 6, chap. 1, p.
314.
De Cussy, in his work on the Phases and Leading Cases of the Maritime Law of Nations,-Phases et Causes Celebres du Droit Maritime
des Nations,- published in 1856, affirms in the clearest language the exemption from capture of fishing boats, saying, in lib. 1, tit. 3, 36,
that 'in time of war the freedom of fishing is respected by belligerents; fishing boats are considered as neutral; in law, as in principle,
they are not subject either to capture or to confiscation;' and that in lib. 2, chap. 20, he will state 'several facts and several
decisions [175 U.S. 677, 702] which prove that the perfect freedom and neutrality of fishing boats are not illusory.' 1 De Cussy, p. 291.
And in the chapter so referred to, entitled De la Liberte et de la Neutralite Parfaite de la Peche, besides references to the edicts and
decisions in France during the French Revolution, is this general statement: 'If one consulted only positive international law,'-le droit des
gens positif,-(by which is evidently meant international law expressed in treaties, decrees, or other public acts, as distinguished from
what may be implied from custom or usage) 'fishing boats would be subject, like all other trading vessels, to the law of prize; a sort of
tacit agreement among all European nations frees them from it, and several official declarations have confirmed this privilege in favor of
'a class of men whose hard and ill-rewarded labor, commonly performed by feeble and aged hands, is so foreign to the operations of
war.' 2 De Cussy, 164, 165.

Ortolan, in the fourth edition of his Regles Internationales et Diplomatie de la Mer, published in 1864, after stating the general rule that
the vessels and cargoes of subjects of the enemy are lawful prize, says: 'Nevertheless, custom admits an exception in favor of boats
engaged in the coast fishery; these boats, as well as their crews, are free from capture and exempt from all hostilities. The coast-fishing
industry is, in truth, wholly pacific, and of much less importance in regard to the national wealth that it may produce than maritime
commerce or the great fisheries. Peaceful and wholly inoffensive, those who carry it on, among whom women are often seen, may be
called the harvesters of the territorial seas, since they confine themselves to gathering in the products thereof; they are for the most part
poor families who seek in this calling hardly more than the means of gaining their livelihood.' 2 Ortolan, 51. Again, after observing that
there are very few solemn public treaties which make mention of the immunity of fishing boats in time of war, he says: 'From another
point of view the custom which sanctions this immunity is not so general that it can be considered as making an absolute international
rule; but it has been so often put in practice, and, besides, it accords so well with the rule in use in wars on [175 U.S. 677, 703] land, in
regard to peasants and husbandmen, to whom coast fishermen may be likened, that it will doubtless continue to be followed in maritime
wars to come.' 2 Ortolan, 55.

No international jurist of the present day has a wider or more deserved reputation than Calvo, who, though writing in French, is a citizen
of the Argentine Republic, employed in its diplomatic service abroad. In the fifth edition of his great work on international law, published
in 1896, he observes, in 2366, that the international authority of decisions in particular cases by the prize courts of France, of England,
and of the United States is lessened by the fact that the principles on which they are based are largely derived from the internal
legislation of each country; and yet the peculiar character of maritime wars, with other considerations, gives to prize jurisprudence a
force and importance reaching beyond the limits of the country in which it has prevailed. He therefore proposes here to group together
a number of particular cases proper to serve as precedents for the solution of grave questions of maritime law in regard to the capture
of private property as prize of war. Immediately, in 2367, he goes on to say: 'Notwithstanding the hardships to which maritime wars
subject private property, notwithstanding the extent of the recognized rights of belligerents, there are generally exempted, from seizure
and capture, fishing vessels.' In the next section he adds: 'This exception is perfectly justiciable,-Cette exception est parfaitement
justiciable,'-that is to say, belonging to judicial jurisdiction or cognizance. Littre, Dist. voc. Justiciable; Hans v. Louisiana, 134 U.S. 1,
15 , 33 S. L. ed. 842, 847, 10 Sup. Ct. Rep. 504. Calvo then quotes Ortolan's description, above cited, of the nature of the coast-fishing
industry; and proceeds to refer, in detail, to some of the French precedents, to the acts of the French and English governments in the
times of Louis XVI. and of the French Revolution, to the position of the United States in the war with Mexico, and of France in later
wars, and to the action of British cruisers in the Crimean war. And he concludes his discussion of the subject, in 2373, by affirming the
exemption of the coast fishery, and pointing out the distinction in this regard between the coast fishery and [175 U.S. 677, 704] what
he calls the great fishery, for cod, whales, or seals, as follows: 'The privilege of exemption from capture, which is generally acquired by
fishing vessels plying their industry near the coasts, is not extended in any country to ships employed on the high sea in what is called
the great fishery, such as that for the cod, for the whale or the sperm whale, or for the seal or sea calf. These ships are, in effect,
considered as devoted to operations which are at once commercial and industrial,-Ces navires sont en effect consideres comme
adonnes a des operations a la fois commerciales et industrielles.' The distinction is generally recognized. 2 Ortolan, 54; De Boeck, 196;
Hall, 148. See also The Susa, 2 C. Rob. 251; The Johan, Edw. Adm. 275, and appx. L.

The modern German books on international law, cited by the counsel for the appellants, treat the custom by which the vessels and
implements of coast fishermen are exempt from seizure and capture as well established by the practice of nations. Heffter, 137; 2
Kalterborn, 237, p. 480; Bluntschli, 667; Perels, 37, p. 217.

De Boeck, in his work on Enemy Private Property under Enemy's Flag,- De la Propriete Privee Ennemie sous Pavillon Ennemi,-
published in 1882, and the only continental treatise cited by the counsel for the United States, says in 191: 'A usage very ancient, if not
universal, withdraws from the right of capture enemy vessels engaged in the coast fishery. The reason of this exception is evident; it
would have been too hard to snatch from poor fishermen the means of earning their bread. . . . The exemption includes the boats, the
fishing implements, and the cargo of fish.' Again, in 195: 'It is to be observed that very few treatises sanction in due form this immunity
of the coast fishery. . . . There is, then, only a custom. But what is its character? Is it so fixed and general that it can be raised to the
rank of a positive and formal rule of international law?' After discussing the statements of other writers, he approves the opinion of
Ortolan (as expressed in the last sentence above quoted from his work), and says that, at bottom, it differs by a shade only from that
formulated by Calvo and by some of the German jurists, and that 'it is more exact, [175 U.S. 677, 705] without ignoring the imperative
character of the humane rule in question,- elle est plus exacte, sans meconnaitre le caractere imperatif de la regle d'humanite dont il
s'agit.' And in 196 he defines the limits of the rule as follows: 'But the immunity of the coast fishery must be limited by the reasons which
justify it. The reasons of humanity and of harmlessness-les raisons d'humanite et d'innocuite-which militate in its favor do not exist in
the great fishery, such as the cod fishery; ships engaged in that fishery devote themselves to truly commercial operations, which
employ a large number of seamen. And these same reasons cease to be applicable to fishing vessels employed for a warlike purpose,
to those which conceal arms, or which exchange signals of intelligence with ships of war; but only those taken in the fact can be
rigorously treated; to allow seizure by way of preventive would open the door to every abuse, and would be equivalent to a suppression
of the immunity.'

Two recent English text-writers cited at the bar (influenced by what Lord Stowell said a cantury since) hesitate to recognize that the
exemption of coast fishing vessels from capture has now become a settled rule of international law. Yet they both admit that there is
little real difference in the views, or in the practice, of England and of other maritime nations; and that no civilized nation at the present
day would molest coast fishing vessels so long as they were peaceably pursuing their calling and there was no danger that they or their
crews might be of military use to the enemy. Hall, in 148 of the fourth edition of his Treatise on International Law, after briefly sketching
the history of the positions occupied by France and England at different periods, and by the United States in the Mexican war, goes on
to say: 'In the foregoing facts there is nothing to show that much real difference has existed in the practice of the maritime countries.
England does not seem to have been unwilling to spare fishing vessels so long as they are harmless, and it does not appear that any
state has accorded them immunity under circumstances of inconvenience to itself. It is likely that all nations would now refrain from
molesting them as a general rule, and would cap- [175 U.S. 677, 706] ture them so soon as any danger arose that they or their crews
might be of military use to the enemy; and it is also likely that it is impossible to grant them a more distinct exemption.' So, T. J.
Lawrence, in 206 of his Principles of International Law, says: 'The difference between the English and the French view is more
apparent than real; for no civilized belligerent would now capture the boats of fishermen plying their avocation peaceably in the
territorial waters of their own state; and no jurist would seriously argue that their immunity must be respected if they were used for
warlike purposes, as were the smacks belonging to the northern ports of France when Great Britain gave the order to capture them in
1800.'

But there are writers of various maritime countries, not yet cited, too important to be passed by without notice.

Jan Helenus Ferguson, Netherlands Minister to China, and previously in the naval and in the colonial service of his country, in his
Manual of International Law for the Use of Navies, Colonies, and Consulates, published in 1882, writes: 'An exception to the usage of
capturing enemy's private vessels at sea is the coast fishery. . . . This principle of immunity from capture of fishing boats is generally
adopted by all maritime powers, and in actual warfare they are universally spared so long as they remain harmless.' 2 Ferguson, 212.

Ferdinand Attlmayr, captain in the Austrian Navy, in his Manual for Naval Officers, published at Vienna in 1872 under the auspices of
Admiral Tegetthoff, says: 'Regarding the capture of enemy property, an exception must be mentioned, which is a universal custom.
Fishing vessels which belong to the adjacent coast, and whose business yields only a necessary livelihood, are, from considerations of
humanity, universally excluded from capture.' 1 Attlmayr, 61.

Ignacio de Megrin, First Official of the Spanish Board of Admiralty, in his Elementary Treatise on Maritime International Law, adopted by
royal order as a text-book in the naval schools of Spain, and published at Madrid in 1873, concludes his chapter 'Of the lawfulness of
prizes' with these words: 'It remains to be added that the custom of all civilized peoples excludes from capture and from all kind of
hostility the [175 U.S. 677, 707] fishing vessels of the enemy's coasts, considering this industry as absolutely inoffensive, and
deserving, from its hardships and usefulness, of this favorable exception. It has been thus expressed in very many international
conventions, so that it can be deemed an incontestable principle of law, at least among enlightened nations.' Negrin, tit. 3, chap. 1, 310.

Carlos Testa, captain in the Portugese Navy and professor in the naval school at Lisbon, in his work on Public International Law,
published in French at Paris in 1886, when discussing the general right of capturing enemy ships, says: 'Nevertheless, in this,
customary law establishes an exception of immunity in favor of coast fishing vessels. Fishing is so peaceful an industry, and is
generally carried on by so poor and so hardworking a class of men, that it is likened, in the territorial waters of the enemy's country, to
the class of husbandmen who gather the fruits of the earth for their livelihood. The examples and practice generally followed establish
this humane and beneficent exception as an international rule, and this rule may be considered as adopted by customary law and by all
civilized nations.' Testa, pt. 3, chap. 2, in 18 Bibliotheque International et Diplomatique, pp. 152, 153.

No less clearly and decisively speaks the distinguished Italian jurist, Pasquale Fiore, in the enlarged edition of his exhaustive work on
Public International Law, published at Paris in 1885-6, saying: 'The vessels of fishermen have been generally declared exempt from
confiscation, because of the eminently peaceful object of their humble industry, and of the principles of equity and humanity. The
exemption includes the vessel, the implements of fishing, and the cargo resulting from the fishery. This usage, eminently humane, goes
back to very ancient times; and although the immunity of the fishery along the coasts may not have been sanctioned by treaties, yet it is
considered to-day as so defintely established that the inviolability of vessels devoted to that fishery is proclaimed by the publicists as a
positive rule of international law, and is generally respected by the nations. Consequently we shall lay down the following rule: (a)
Vessels belonging to citizens of the enemy state, and devoted to fish- [175 U.S. 677, 708] ing along the coasts, cannot be subject to
capture; (b) Such vessels, however, will lose all right of exemption, when employed for a warlike purpose; (c) there may, nevertheless,
be subjected to capture vessels devoted to the great fishery in the ocean, such as those employed in the whale fishery, or in that for
seals or sea calves.' 3 Fiore, 1421

This review of the precedents and authorities on the subject appears to us abundantly to demonstrate that at the present day, by the
general consent of the civilized nations of the world, and independently of any express treaty or other public act, it is an established rule
of international law, founded on considerations of humanity to a poor and industrious order of men, and of the mutual convenience of
belligerent states, that coast fishing vessels, with their implements and supplies, cargoes and crews, unarmed and honestly pursuing
their peaceful calling of catching and bringing in fresh fish, are exempt from capture as prize of war.

The exemption, of course, does not apply to coast fishermen or their vessels if employed for a warlike purpose, or in such a way as to
give aid or information to the enemy; nor when military or naval operations create a necessity to which all private interests must give
way.
Nor has the exemption been extended to ships or vessels employed on the high sea in taking whales or seals or cod or other fish which
are not brought fresh to market, but are salted or otherwise cured and made a regular article of commerce.

This rule of international law is one which prize courts administering the law of nations are bound to take judicial notice of, and to give
effect to, in the absence of any treaty or other public act of their own government in relation to the matter.

Calvo, in a passage already quoted, distinctly affirms that the exemption of coast fishing vessels from capture is perfectly justiciable, or,
in other words, of judicial jurisdiction or cognizance. Calvo, 2368. Nor are judicial precedents wanting in support of the view that this
exemption, or a somewhat analogous one, should be recognized and declared by a prize court. [175 U.S. 677, 709] By the practice of
all civilized nations, vessels employed only for the purposes of discovery or science are considered as exempt from the contingencies
of war, and therefore not subject to capture. It has been usual for the government sending out such an expedition to give notice to other
powers; but it is not essential. 1 Kent, Com. 91, note; Halleck, chap. 20, 22; Calvo, 2376; Hall, 138.

In 1813, while the United States were at war with England, an American vessel on her voyage from Italy to the United States was
captured by an English ship, and brought into Halifax, in Nova Scotia, and, with her cargo, condemned as lawful prize by the court of
vice admiralty there. But a petition for the restitution of a case of paintings and engravings which had been presented to and were
owned by the Academy of Arts in Philadelphia was granted by Dr. Croke, the judge of that court, who said: 'The same law of nations,
which prescribes that all property belonging to the enemy shall be liable to confiscation, has likewise its modifications and relaxations of
that rule. The arts and sciences are admitted amongst all civilized nations, as forming an exception to the severe rights of warfare, and
as entitled to favor and protection. They are considered, not as the peculium of this or of that nation, but as the property of mankind at
large, and as belonging to the common interests of the whole species.' And he added that there had been 'innumerable cases of the
mutual exercise of this courtesy between nations in former wars.' The Marquis de Somerueles, Stewart Adm. (Nova Scotia) 445, 482.

In 1861, during the war of the Rebellion, a similar decision was made in the district court of the United States for the eastern district of
Pennsylvania, in regard to two cases of books belonging and consigned to a university in North Carolina. Judge Cadwalader, in
ordering these books to be liberated from the custody of the marshal and restored to the agent of the university, said: 'Though this
claimant, as the resident of a hostile district, would not be entitled to restitution of the subject of a commercial adventure in books, the
purpose of the shipment in question gives to it a different [175 U.S. 677, 710] character. The United States, in prosecuting hostilities
for the restoration of their constitutional authority, are compelled incidentally to confiscate property captured at sea, of which the
proceeds would otherwise increase the wealth of that district. But the United States are not at war with literature in that part of their
territory.' He then referred to the decision in Nova Scotia, and to the French decisions upon cases of fishing vessels, as precedents for
the decree which he was about to pronounce; and he added that, without any such precedents, he should have had no difficulty in
liberating these books. The Amelia,1 4 Phila. 417.

In Brown v. United States, 8 Cranch, 110, 3 L. ed. 504, there are expressions of Chief Justice Marshall which, taken by themselves,
might seem inconsistent with the position above maintained, of the duty of a prize court to take judicial notice of a rule of international
law, established by the general usage of civilized nations, as to the kind of property subject to capture. But the actual decision in that
case, and the leading reasons on which it was based, appear to us rather to confirm our position. The principal question there was
whether personal property of a British subject, found on land in the United States at the beginning of the last war with Great Britain,
could lawfully be condemned as enemy's property, on a libel filed by the attorney of the United States, without a positive act of
Congress. The conclusion of the court was 'that the power of confiscating enemy property is in the legislature, and that the legislature
has not yet declared its will to confiscate property which was within our territory at the declaration of war.' 8 Cranch, 129, 3 L. ed. 510,
511. In showing that the declaration of war did not, of itself, vest the Executive with authority to order such property to be confiscated,
the Chief Justice relied on the modern usages of nations, saying: 'The universal practice of forbearing to seize and confiscate debts and
credits, the principle universally received that the right to them revives on the restoration of peace, would seem to prove that war is not
an absolute confiscation of this property, but simply confers the right of confiscation,' and again: 'The modern rule, then, would seem to
be that tangible property [175 U.S. 677, 711] belonging to an enemy, and found in the country at the commencement of war, ought not
to be immediately confiscated; and in almost every commercial treaty an article is inserted stipulating for the right to withdraw such
property.' 8 Cranch, 123, 125, 3 L. ed. 509. The decision that enemy property on land, which by the modern usage of nations is not
subject to capture as prize of war, cannot be condemned by a prize court, even by direction of the Executive, without express authority
from Congress, appears to us to repel any inference that coast fishing vessels, which are exempt by the general consent of civilized
nations from capture, and which no act of Congress or order of the President has expressly authorized to be taken and confiscated,
must be condemned by a prize court, for want of a distinct exemption in a treaty or other public act of the government.

To this subject in more than one aspect are singularly applicable the words uttered by Mr. Justice Strong, speaking for this court:
'Undoubtedly no single nation can change the law of the sea. The law is of universal obligation and no statute of one or two nations can
create obligations for the world. Like all the laws of nations, it rests upon the common consent of civilized communities. It is of force, not
because it was prescribed by any superior power, but because it has been generally accepted as a rule of conduct. Whatever may have
been its origin, whether in the usages of navigation, or in the ordinances of maritime states, or in both, it has become the law of the sea
only by the concurrent sanction of those nations who may be said to constitute the commercial world. Many of the usages which prevail,
and which have the force of law, doubtless originated in the positive prescriptions of some single state, which were at first of limited
effect, but which, when generally accepted, became of universal obligation.' 'This is not giving to the statutes of any nation
extraterritorial effect. It is not treating them as general maritime laws; but it is recognition of the historical fact that by common consent
of mankind these rules have been acquiesced in as of general obligation. Of that fact, we think, we may take judicial notice. Foreign
municipal laws [175 U.S. 677, 712] must indeed be proved as facts, but it is not so with the law of nations.' The Scotia, 14 Wall. 170,
187, 188, sub nom. Sears v. The Scotia, 20 L. ed. 822, 825, 826.
The position taken by the United States during the recent war with Spain was quite in accord with the rule of international law, now
generally recognized by civilized nations, in regard to coast fishing vessels.

On April 21, 1898, the Secretary of the Navy gave instructions to Admiral Sampson, commanding the North Atlantic Squadron, to
'immediately institute a blockade of the north coast of Cuba, extending from Cardenas on the east to Bahia Honda on the west.' Bureau
of Navigation Report of 1898, appx. 175. The blockade was immediately instituted accordingly. On April 22 the President issued a
proclamation declaring that the United States had instituted and would maintain that blockade, 'in pursuance of the laws of the United
States, and the law of nations applicable to such cases.' 30 Stat. at L. 1769. And by the act of Congress of April 25, 1898, chap. 189, it
was declared that the war between the United States and Spain existed on that day, and had existed since and including April 21, 30
Stat. at L. 364.

On April 26, 1898, the President issued another proclamation which, after reciting the existence of the war as declared by Congress,
contained this further recital: 'It being desirable that such war should be conducted upon principles in harmony with the present views of
nations and sanctioned by their recent practice.' This recital was followed by specific declarations of certain rules for the conduct of the
war by sea, making no mention of fishing vessels. 30 Stat. at L. 1770. But the proclamation clearly manifests the general policy of the
government to conduct the war in accordance with the principles of international law sanctioned by the recent practice of nations.

On April 28, 1898 (after the capture of the two fishing vessels now in question), Admiral Sampson telegraphed to the Secretary of the
Navy as follows: 'I find that a large number of fishing schooners are attempting to get into Havana from their fishing grounds near the
Florida reefs and coasts. They are generally manned by excellent seamen, belonging [175 U.S. 677, 713] to the maritime inscription of
Spain, who have already served in the Spanish navy, and who are liable to further service. As these trained men are naval reserves,
most valuable to the Spaniards as artillerymen, either afloat or ashore, I recommend that they should be detained prisoners of war, and
that I should be authorized to deliver them to the commanding officer of the army at Key West.' To that communication the Secretary of
the Navy, on April 30, 1898, guardedly answered: 'Spanish fishing vessels attempting to violate blockade are subject, with crew, to
capture, and any such vessel or crew considered likely to aid enemy may be detained.' Bureau of Navigation Report of 1898, appx.
178. The admiral's despatch assumed that he was not authorized, without express order, to arrest coast fishermen peaceably pursuing
their calling; and the necessary implication and evident intent of the response of the Navy Department were that Spanish coast fishing
vessels and their crews should not be interfered with, so long as they neither attempted to violate the blockade, nor were considered
likely to aid the enemy.

The Paquete Habana, as the record shows, was a fishing sloop of 25 tons burden, sailing under the Spanish flag, running in and out of
Havana, and regularly engaged in fishing on the coast of Cuba. Her crew consisted of but three men, including the master, and,
according to a common usage in coast fisheries, had no interest in the vessel, but were entitled to two thirds of her catch, the other third
belonging to her Spanish owner, who, as well as the crew, resided in Havana. On her last voyage, she sailed from Havana along the
coast of Cuba, about 200 miles, and fished for twenty-five days off the cape at the west end of the island, within the territorial waters of
Spain, and was going back to Havana, with her cargo of live fish, when she was captured by one of the blockading squadron, on April
25, 1898. She had no arms or ammunition on board; she had no knowledge of the blockade, or even of the war, until she was stopped
by a blockading vessel; she made no attempt to run the blockade, and no resistance at the time of the capture; nor was there any
ev- [175 U.S. 677, 714] idence whatever of likelihood that she or her crew would aid the enemy.

In the case of the Lola, the only differences in the facts were that she was a schooner of 35 tons burden, and had a crew of six men,
including the master; that after leaving Havana, and proceeding some 200 miles along the coast of Cuba, she went on, about 100 miles
farther, to the coast of Yucatan, and there fished for eight days; and that, on her return, when near Bahia Honda, on the coast of Cuba,
she was captured, with her cargo of live fish, on April 27, 1898. These differences afford no ground for distinguishing the two cases.

Each vessel was of a moderate size, such as is not unusual in coast fishing smacks, and was regularly engaged in fishing on the coast
of Cuba. The crew of each were few in number, had no interest in the vessel, and received, in return for their toil and enterprise, two
thirds of her catch, the other third going to her owner by way of compensation for her use. Each vessel went out from Havana to her
fishing ground, and was captured when returning along the coast of Cuba. The cargo of each consisted of fresh fish, caught by her
crew from the sea, and kept alive on board. Although one of the vessels extended her fishing trip across the Yucatan channel and
fished on the coast of Yucatan, we cannot doubt that each was engaged in the coast fishery, and not in a commercial adventure, within
the rule of international law.

The two vessels and their cargoes were condemned by the district court as prize of war; the vessels were sold under its decrees; and it
does not appear what became of the fresh fish of which their cargoes consisted.

Upon the facts proved in either case, it is the duty of this court, sitting as the highest prize court of the United States, and administering
the law of nations, to declare and adjudge that the capture was unlawful and without probable cause; and it is therefore, in each case,--

Ordered, that the decree of the District Court be reversed, and the proceeds of the sale of the vessel, together with the proceeds of any
sale of her cargo, be restored to the claimant, with damages and costs. [175 U.S. 677, 715]

Mr. Chief Justice Fuller, with whom concurred Mr. Justice Harlan and Mr. Justice McKenna, dissenting:

The district court held these vessels and their cargoes liable because not 'satisfied that as a matter of law, without any ordinance,
treaty, or proclamation, fishing vessels of this class are exempt from seizure.'
This court holds otherwise, not because such exemption is to be found in any treaty, legislation, proclamation, or instruction granting it,
but on the ground that the vessels were exempt by reason of an established rule of international law applicable to them, which it is the
duty of the court to enforce.

I am unable to conclude that there is any such established international rule, or that this court can properly revise action which must be
treated as having been taken in the ordinary exercise of discretion in the conduct of war.

In cannot be maintained 'that modern usage constitutes a rule which acts directly upon the thing itself by its own force, and not through
the sovereign power.' That position was disallowed in Brown v. United States, 8 Cranch, 110, 128, 3 L. ed. 510, and Chief Justice
Marshall said: 'This usage is a guide which the sovereign follows or abandons at his will. The rule, like other precepts of morality, of
humanity, and even of wisdom, is addressed to the judgment of the sovereign; and although it cannot be disregarded by him without
obloquy, yet it may be disregarded. The rule is in its nature flexible. It is subject to infinite modification. It is not an immutable rule of law,
but depends on political considerations which may continually vary.'

The question in that case related to the confiscation of the property of the enemy on land within our own territory, and it was held that
property so situated could not be confiscated without an act of Congress. The Chief Justice continued: 'Commercial nations in the
situation of the United States have always a considerable quantity of property in the possession of their neighbors. When war breaks
out, the question, What shall be done with enemy property in our country?-is a [175 U.S. 677, 716] question rather of policy than of
law. The rule which we apply to the property of our enemy will be applied by him to the property of our citizens. Like all other questions
of policy, it is proper for the consideration of a department which can modify it at will; not for the consideration of a department which
can pursue only the law as it is written. It is proper for the consideration of the legislature, not of the executive or judiciary.'

This case involves the capture of enemy's property on the sea, and executive action, and if the position that the alleged rule proprio
vigore limits the sovereign power in war be rejected, then I understand the contention to be that, by reason of the existence of the rule,
the proclamation of April 26 must be read as if it contained the exemption in terms, or the exemption must be allowed because the
capture of fishing vessels of this class was not specifically authorized.

The preamble to the proclamation stated, it is true, that it was desirable that the war 'should be conducted upon principles in harmony
with the present views of nations and sanctioned by their recent pratice,' but the reference was to the intention of the government 'not to
resort to privateering, but to adhere to the rules of the Declaration of Paris;' and the proclamation spoke for itself. The language of the
preamble did not carry the exemption in terms, and the real question is whether it must be allowed because not affirmatively withheld,
or, in other words, because such captures were not in terms directed.

These records show that the Spanish sloop Paquete Habana 'was captured as a prize of war by the U. S. S. Castine' on April 25, and
'was delivered' by the Castine's commander 'to Rear Admiral Wm. T. Sampson ( commanding the North Atlantic Squardron),' and
therequpon 'turned over' to a prize master with instructions to proceed to Key West.

And that the Spanish schooner Lola 'was captured as a prize of war by the U. S. S. Dolphin,' April 27, and 'was delivered' by the
Dolphin's commander 'to Rear Admiral Wm. T. Sampson (commanding the North Atlantic Squardron),' and thereupon 'turned over' to a
prize master with instructions to proceed to Key West. [175 U.S. 677, 717] That the vessels were accordingly taken to Key West and
there libeled, and that the decrees of condemnation were entered against them May 30.

It is impossible to concede that the Admiral ratified these captures in disregard of established international law and the proclamation, or
that the President, if he had been of opinion that there was any infraction of law or proclamation, would not have intervened prior to
condemnation.

The correspondence of April 28, 30, between the Admiral and the Secretary of the Navy, quoted from in the principal opinion, was
entirely consistent with the validity of the captures.

The question put by the Admiral related to the detention as prisoners of war of the persons manning the fishing schooners 'attempting
to get into Havana.' Noncombatants are not so detained except for special reasons. Sailors on board enemy's trading vessels are made
prisoners because of their fitness for immediate use on ships of war. Therefore the Admiral pointed out the value of these fishing
seamen to the enemy, and advised their detention. They Secretary replied that if the vessels referred to were 'attempting to violate
blockade' they were subject 'with crew' to capture, and also that they might be detained if 'considered likely to aid enemy.' The point
was whether these crews should be made prisoners of war. Of course they would be liable to be if involved in the guilt of blockade
running, and the Secretary agreed that they might be on the other ground in the Admiral's discretion.

All this was in accordance with the rules and usages of international law, with which, whether in peace or war, the naval service has
always been necessarily familiar.

I come then to examine the proposition 'that at the present day, by the general consent of the civilized nations of the world, and
independently of any express treaty or other public act, it is an established rule of international law, founded on considerations of
humanity to a poor and industrious order of men, and of the mutual convenience of belligerent states, that coast fishing vessels, with
their implements and supplies [175 U.S. 677, 718] cargoes and crews, undarmed, and honestly pursuing their peaceful calling of
catching and bringing in of fresh fish, are exempt from capture as prize of war.'

This, it is said, is a rule 'which prize courts, administering the law of nations, are bound to take judicial notice of, and to give effect to, in
the absence of treaty or other public act of their own government.'
At the same time it is admitted that the alleged exemption does not apply 'to coast fishermen or their vessels, if employed for a warlike
purpose, or in such a way as to give aid or information to the enemy; nor when military or naval operations create a necessity to which
all private interests must give way;' and, further, that the exemption has not 'been extended to ships or vessels employed on the high
sea in taking whales or seals, or cod or other fish which are not brought fresh to market, but are salted or otherwise cured and made a
regular article of commerce.'

It will be perceived that the exceptions reduce the supposed rule to very narrow limits, requiring a careful examination of the facts in
order to ascertain its applicability; and the decision appears to me to go altogether too far in respect of dealing with captures directed or
ratified by the officer in command.

But were these two vessels within the alleged exemption? They were of 25 and 35 tons burden respectively. They carried large tanks,
in which the fish taken were kept alive. They were owned by citizens of Havana, and tha owners and the masters and crew were to be
compensated by shares of the catch. One of them had been 200 miles from Havana, off Cape San Antonio, for twenty-five days, and
the other for eight days off the coast of Yucatan. They belonged, in short, to the class of fishing or coasting vessels of from 5 to 20 tons
burden, and from 20 tons upwards, which, when licensed or enrolled as prescribed by the Revised Statutes. are declared to be vessels
of the United States, and the shares of whose men, when the vessels are employed in fishing, are regulated by statute. They were
engaged in what were substantially commercial ventures, and the mere fact that the fish were kept alive by contrivances [175 U.S. 677,
719] for that purpose-a practice of considerable antiquity-did not render them any the less an article of trade than if they had been
brought in cured.

I do not think that, under the circumstances, the considerations which have operated to mitigate the evils of war in respect of individual
harvesters of the soil can properly be invoked on behalf of these hired vessels, as being the implements of like harvesters of the sea.
Not only so as to the owners, but as to the masters and crews. The principle which exempts the husbandman and his instruments of
labor exempts the industry in which he is engaged, and is not applicable in protection of the continuance of transactions of such
character and extent as these.

In truth, the exemption of fishing craft is essentially an act of grace, and not a matter of right, and it is extended or denied as the
exigency is believed to demand.

It is, said Sir William Scott, 'a rule of comity only, and not of legal decision.'

The modern view is thus expressed by Mr. Hall: 'England does not seem to have been unwilling to spare fishing vessels so long as they
are harmless, and it does not appear that any state has accorded them immumty under circumstances of inconvenience to itself. It is
likely that all nations would now refrain from molesting them as a general rule, and would capture them so soon as any danger arose
that they or their crews might be of military use to the enemy; and it is also likely that it is impossible to grant them a more distinct
exemption.'

In the Crimean war, 1854-55, none of the orders in council, in terms, either exempted or included fishing vessels, yet the allied
squadrons swept the Sea of Azof of all craft capable of furnishing the means of transportation, and the English admiral in the Gulf of
Finland directed the destruction of all Russian coasting vessels, not of sufficient value to be detained as prizes, except 'boats or small
craft which may be found empty at anchor, and not trafficking.'

It is difficult to conceive of a law of the sea of universal obligation to which Great Britain has not acceded. And I [175 U.S. 677,
720] am not aware of adequate foundation for imputing to this country the adoption of any other than the English rule.

In his Lectures on International Law at the Naval Law College the late Dr. Freeman Snow laid it down that the exemption could not be
asserted as a rule of international law. These lectures were edited by Commodore Stockton and published under the direction of the
Secretary of the Navy in 1895, and, by that department, in a second edition, in 1898, so that in addition to the well-known merits of their
author they possess the weight to be attributed to the official imprimatur. Neither our treaties nor settled practice are opposed to that
conclusion.

In view of the circumstances surrounding the breaking out of the Mexican war, Commodore Conner, commanding the Home Squadron,
on May 14, 1846, directed his officers, in respect of blockade, not to molest 'Mexican boats engaged exclusively in fishing on any part
of the coast,' presumably small boats in proximity to the shore; while on the Pacific coast Commodore Stockton in the succeeding
August ordered the capture of 'all vessels under the Mexican flag.'

The treaties with Prussia of 1785, 1799, and 1828, and of 1848 with Mexico, in exempting fishermen, 'unarmed and inhabiting
unfortified towns, villages, or places,' did not exempt fishing vessels from seizure as prize; and these captures evidence the convictions
entertained and acted on in the late war with Spain.

In is needless to review the speculations and repetitions of the writers on international law. Ortolan, De Boeck, and others admit that the
custom relied on as consecrating the immunity is not so general as to create an absolute international rule; Heffter, Calvo, and others
are to the contrary. Their lucubrations may be persuasive, but not authoritative.

In my judgment, the rule is that exemption from the rigors of war is in the control of the Executive. He is bound by no immutable rule on
the subject. It is for him to apply, or to modify, or to deny altogether such immunity as may have been usually extended. [175 U.S. 677,
721] Exemptions may be designated in advance, or granted according to circumstances, but carrying on was involves the inflication of
the hardships of war, at least to the extent that the seizure or destruction of enemy's property on sea need not be specifically authorized
in order to be accomplished.

Being of opinion that these vessels were not exempt as matter of law, I am constrained to dissent from the opinion and judgment of the
court; and my brothers Harlan and McKenna concur in this dissent.

(January 29, 1900.)

The court, in each case, on motion of the Solicitor General in behalf of the United States, and after argument of counsel thereon, and to
secure the carrying out of the opinion and decree of this court according to their true meaning and intent, ordered that the decree be so
modified as to direct that the damages to be allowed shall be compensatory only, and not punitive.
 File E. c. XIII.
Docket XIV: I.
Judgment No. 13
13 September 1928

PERMANENT COURT OF INTERNATIONAL JUSTICE

Fourteenth (Ordinary) Session

The Factory At Chorzow (Claim for Indemnity) (The Merits)

Germany v. Poland

Judgment

BEFORE: President: Anzilotti

Former
Huber
President:
Judges: Lord Finlay, Nyholm, de Bustamante, Altamira,Oda, Pessoa
Deputy
Beichmann
Judge(s):
National Judge: Rabel, Ehrlich

Represented By: Germany: Dr. Erich Kaufmann, Professor at Berlin

Thadeus Sobolewski, Agent for the Polish Government before the Polish-German Mixed Arbitral
Poland:
Tribunal

Perm. Link: http://www.worldcourts.com/pcij/eng/decisions/1928.09.13_chorzow1.htm

Citation: Factory at Chorzow (Germ. v. Pol.), 1928 P.C.I.J. (ser. A) No. 17 (Sept. 13)
Publication: Publications of the Permanent Court of International Justice Series A - No. 17; Collection of Judgments A.W.
Sijthoff’s Publishing Company, Leyden, 1928.

[p5] THE COURT,

composed as above,
having heard the observations and conclusions of the Parties,
delivers the following judgment:

[1] The Government of the German Reich, by an Application instituting proceedings filed with the Registry of the Court on February 8th,
1927, in conformity with Article 40 of the Statute and Article 35 of the Rules of Court, has submitted to the Permanent Court of
International Justice a suit concerning the reparation which, in the contention of the Government of the Reich, is due by the Polish
Government for the damage suffered by the Oberschlesische Stickstoffwerke A.-G. (hereinafter designated as the Oberschlesische)
and the Bayerische Stickstoffwerke A.-G. (hereinafter designated as the Bayerische) in consequence of the attitude adopted by that
Government towards those Companies in taking possession of the nitrate factory situated at Chorzów, which attitude has been
declared by the Court in Judgment No. 7 (May 25th, 1926) not to have been in conformity with the provisions of Article 6 and the
following articles of the Convention concerning Upper Silesia concluded at Geneva on May 13th, 1922, between Germany and Poland
(hereinafter described as the Geneva Convention).

[2] On receipt of the German Government's Case in the suit, on March 3rd, 1927, the Polish Government, on April 14th, 1927, raised a
preliminary objection denying the Court's jurisdiction to hear the suit brought before it and submitting that the Court should, "without
entering into the merits, declare that it had no jurisdiction".

[3] The Court dealt with this plea in its Judgment No. 8 given on July 26th, 1927, by which it overruled the preliminary objection raised
by the Polish Government and reserved for judgment on the merits the suit brought on February 8th, 1927, by the German
Government.

[4] Furthermore, under the terms of this judgment, the President was instructed to fix the times for the filing of the Counter-Case, Reply
and Rejoinder on the merits. These times, which were in the first place fixed to expire on [p6] September 30th, November 15th and
December 30th, 1927, were subsequently extended by successive decisions until November 30th, 1927, February 20th and May 7th,
1928, respectively.

[5] The documents of the written proceedings were duly filed with the Registrar of the Court within the times finally fixed and were
communicated to those concerned as provided in Article 43 of the Statute.
[6] In the course of hearings held on June 21st, 22nd, 25th, 27th and 29th, 1928, the Court has heard the oral statements, reply and
rejoinder submitted by the above-mentioned Agents for the Parties.

***

[7] The submissions made in the German Government's Application of February 8th, 1927, were as follows:

It is submitted:

[Translation.]
(1) that by reason of its attitude in respect of the Oberschlesische Stickstoffwerke and Bayerische Stickstoffwerke Companies, which
attitude has been declared by the Court not to have been in conformity with the provisions of Article 6 and the following articles of the
Geneva Convention, the Polish Government is under an obligation to make good the consequent damage sustained by the aforesaid
Companies from July 3rd, 1922, until the date of the judgment sought;
(2) that the amount of the compensation to be paid by the Polish Government is 59,400,000 Reichsmarks for the damage caused to
the Oberschlesische Stickstoffwerke Company and 16,775,200 Reichsmarks for the damage caused to the Bayerische Stickstoffwerke
Company;
(3) in regard to the method of payment:

(a) that the Polish Government should pay within one month from the date of judgment, the compensation due to the Oberschlesische
Stickstoffwerke Company for the taking possession of the working capital (raw material, finished and half-manufactured products,
stores, etc.) and the compensation due to the Bayerische Stickstoffwerke Company for the period of exploitation from July 3rd, 1922, to
the date of judgment;
(b) that the Polish Government should pay the sums remaining unpaid by April 15th, 1928, at latest; [p7]
(c) that, from the date of 3judgment, interest at 6 % per annum should be paid by the Polish Government;
(d) that the payments mentioned under (a)-(c) should be made without deduction to the account of the two Companies with the
Deutsche Bank at Berlin;
(e) that, until June 30th, 1931, no nitrated lime and no nitrate of ammonia should be exported to Germany, to the United States of
America, to France or to Italy.

[8] These submissions have, in the course of the written or oral proceedings, undergone modifications which will be indicated below. As
the Court has not in the present suit availed itself of the right conferred upon it under Article 48 of the Statute to make orders as to "the
form and time in which each Party must conclude its arguments", it, in this case, allows the Parties, in accordance with established
precedent, to amend their original submissions, not only in the Case and Counter-Case (Article 40 of the Rules), but also both in the
subsequent documents of the written proceedings and in declarations made by them in the course of the hearings (Article 35 of the
Rules), subject only to the condition that the other Party must always have an opportunity of commenting on the amended
submissions.

[9] Submission No. I of the Application has not been subsequently amended.

[10] On the other hand, with regard to submission No. 2, important amendments have been made. In the Case this submission is
worded as follows:

It is submitted: ....

[Translation.]
(2) that the amount of the compensation to be paid by the Polish Government is 75,920,000 Reichsmarks, plus the present value of the
working capital (raw materials, finished and half-manufactured products, stores, etc.) taken over on July 3rd, 1922, for the damage
caused to the Oberschlesische Stickstoffwerke Company, and 20,179,000 Reichsmarks for the damage caused to the Bayerische
Stickstoffwerke Company.

[11] In comparing submission (2) of the Case with submission (2) of the Application, regard must be had to the following facts resulting
from the Case: [p8]

(a) that the total of 59,400,000 mentioned in the Application as the figure representing the damage suffered by the Oberschlesische is
calculated as on July 3rd, 1922;
(b) that this sum includes the sum of 1 million for raw materials, finished and half-manufactured products, stores, etc.
(c) that the. sum of 75,920,000 mentioned in the Case as the figure representing the damage suffered by the Oberschlesische is made
up of 58,400,000 for damages as on July 3rd, 1922, and 17,520,000 for interest at 6% on 58,400,000 for the period July 3rd, 1927, to
July 2nd, 1927;
(d) that this sum does not include an amount for "working capital", compensation for the "present value" of this capital being in the
Case sought in general terms;
(e) that the sum of 16,775,200 mentioned in the Application as the figure representing the damage suffered by the Bayerische is
calculated as on July 3rd, 1922;
(f) that the sum of 20,179,000 mentioned in the Case as representing the damage suffered by the Bayerische is calculated as on July
2nd (or 3rd), 1927, at a rate of interest of 6 % the amount for the Bayerische indicated in the Application is said to contain an error of
calculation.

[12] Lastly, submission (2) of the Application has been amended in the German Agent's oral reply as concerns the compensation
claimed for the damage suffered by the Oberschlesische. This submission runs as follows in the submissions read by the Agent at the
conclusion of his oral Reply:

It is submitted:
[Translation.]

that the total of the compensation to be paid to the German Government is 58,400,000 Reichsmarks, plus 1,656,000 Reichsmarks,
plus interest at 6% on this sum as from July 3rd, 1922, until the date of judgment (for the damage done to the Oberschlesische
Stickstoffwerke A.-G.);
that the total of the compensation to be paid to the German Government is 20,179,000 Reichsmarks for the damage done to the
Bayerische Stickstoffwerke A.-G.

[13] It follows that, as regards the Oberschlesische, the German Government (a) reverts to the sum of 58,400,000 as on [p9] July 3rd,
1922; (b) fixes as 1,656,000 the value of the working capital on that date; (c) claims on these two sums interest at 6% until the date of
judgment, thus abandoning the claim for a lump sum made in the Case.

[14] As regards submission (3) of the German Government's Application, amendments both of form and of substance are to be noted in
the course of the subsequent procedure.

[15] As regards form, paragraph (e) of submission (3) of the Application constitutes by itself a new third submission in the Case, whilst
the substance of paragraphs (a)-(d) of submission No. 3 of the Application has been embodied in a new submission No. 4 (a)-(d) in the
Case. In these circumstances, it is preferable to trace back the modifications made to each of the paragraphs of the original third
submission.

[16] Paragraph 3 (a) is worded as follows in the Case (where it is numbered 4 (a)):

[Translation.]
that the Polish Government should pay, within one month from the date of judgment, the compensation due to the Oberschlesische
Stickstoffwerke Company for the taking possession of the working capital and the compensation due to the Bayerische Stickstoffwerke
Company for the period of exploitation from July 3rd, 1922, to the date of judgment.

[17] As compared with the Application, therefore, this paragraph has undergone a purely superficial modification (deletion of an
explanatory remark in parenthesis), and it has not subsequently been amended.

[18] Paragraph 3 (b) is worded as follows in the Case (where it is numbered 4 (b)):

[Translation.]
that the Polish Government should pay the remaining sums by April 15th, 1928, at latest;
in the alternative, that, in so far as payment may be effected in instalments, the Polish Government shall deliver, within one month from
the date of judgment, bills of exchange for the amounts of the instalments, including interest, payable on the respective dates on which
they fall due to the Oberschlesische Stickstoffwerke Company and to the Bayerische Stickstoffwerke Company. [p10]

[19] Thus to the main original submission has been added an alternative contemplating the possibility of payment by instalments.

[20] The same paragraph is couched in the following terms in the oral reply:

[Translation.]
It is submitted that the Polish Government should pay the remaining sums at latest within fifteen days after the beginning of the
financial year following the judgment; in the alternative that, in so far as payment may be effected by instalments, the Polish
Government should, within one month from the date of judgment, give bills of exchange for the amounts of the instalments, including
interest, payable on maturity to the Oberschlesische Stickstoffwerke A.-G. and to the Bayerische Stickstoffwerke A.-G.

[21] The modification as compared with the previous version consists in the substitution for the date April 15th, 1928, which had
already passed, a time-limit fixed in relation to the beginning of the Polish financial year.

[22] Paragraph 3 (c) of the submissions of the Application (4 (c) of the Case) has undergone no subsequent modification.

[23] On the other hand, paragraph 3 (d) of the Application appears in the Case in the following form (No. 4 (d) of the Case)

[Translation.]
that the Polish Government is not entitled to set off, against the above-mentioned claim for indemnity of the German Government, its
claim in respect of social insurances in Upper Silesia; that it may not make use of any other set-off against the above-mentioned claim
for indemnity; and that the payments mentioned under (a)-(c) should be made without any deduction to the account of the two
Companies with the Deutsche Bank at Berlin.

[24] The original submission is contained in the last part of this paragraph, the principal clause of which now seeks a declaration
excluding any possibility of extra-judicial set-off.

[25] The wording of the Case is retained both in the written and in the oral reply, except that a new alternative submission is added in
regard to the question of the prohibition of extra-judicial set-off. This addition runs as follows: [p11]

[Translation.]
In the alternative it is submitted that set-off is only permissible if the Polish Government puts forward for this purpose a claim in respect
of a debt recognized by the German Government or established by a judgment given between the two Governments.

[26] Turning lastly to paragraph 3 (e) of the submissions in the Application, it is to be observed that this reappears unchanged in
submission 3 of the Case. On the other hand, in the written Reply, whilst the submission of the Application is repeated, the following
alternative is added:

[Translation.]
It is submitted that the Polish Government should be obliged to cease the exploitation of the factory and of the chemical equipment for
the transformation of nitrate of lime into ammonium nitrate, etc.

[27] With this addition, this submission also appears in the oral reply in the following form:

[Translation.]
in the alternative, should the Court not adopt the points of view set out in paragraphs 55 and 57 of the Reply, it is submitted that the
Polish Government should be obliged to cease the exploitation of the factory or of the chemical ,equipment for the production of
ammonium nitrate, etc.

***

[28] In connection with certain submissions made by the Polish Government in regard to the compensation of the Oberschlesische, the
German Government has not merely asked the Court to reject these submissions but has also formulated two other submissions,
namely:

[Translation.]
(1) that the Polish Government is not entitled to refuse to pay compensation to the German Government on the basis of arguments
drawn from Article 256 and for motives of respect for the rights of the Reparation Commission and other third parties;
(2) that the Polish Government's obligation to pay the indemnity awarded by the Court is in no way set aside by a judgment given or to
be given by a Polish municipal court in a suit concerning the question of the ownership of the factory at Chorzów. [p12]

[29] These submissions, which were made in the written Reply and in the first oral statement of the German Agent respectively, have
been maintained unaltered in the oral reply.

[30] Apart from the two additional claims just referred to, the final submissions of the German Government are therefore as follows :

[Translation.]
(1) that by reason of its attitude in respect of the Oberschlesische Stickstoffwerke and Bayerische Stickstoffwerke Companies, which
attitude has been declared by the Court not to have been in conformity with the provisions of Article 6 and the following articles of the
Geneva Convention, the Polish Government is under an obligation to make good the consequent injury sustained by the aforesaid
Companies from July 3rd, 1922, until the date of the judgment sought;
(2) (a) that the amount of the compensation to be paid to the German Government is 58,400,000 Reichsmarks, plus 1,656,000
Reichsmarks, plus interest at 6 % on this sum as from July 3rd, 1922, until the date of judgment (for the damage caused to the
Oberschlesische Stickstoffwerke A.-G.);
(b) that the amount of the compensation to be paid to the German Government is 20,179,000 Reichsmarks for the damage caused to
the Bayerische Stickstoffwerke A.-G. ;
(3) that until June 30th, 1931, no nitrated lime and no nitrate of ammonia should be exported to Germany, to the United States of
America, to France or to Italy;
in the alternative, that the Polish Government should be obliged to cease from exploiting the factory or the chemical equipment for the
production of nitrate of ammonia, etc.;
(4) (a) that the Polish Government should pay, within one month from the, date of judgment, the compensation due to the
Oberschlesische Stickstoffwerke A.-G. for the taking possession of the working capital and the compensation due to the Bayerische
Stickstoffwerke A.-G. for the period of exploitation from July 3rd, 1922, to the date of judgment;
(b) that the Polish Government should pay the remaining sums at latest within fifteen days after the beginning of the financial year
following the judgment; in the alternative, that, in so far as payment may be effected by instalments, the Polish Government should
within one month from the date of judgment, give bills of exchange for the amounts of the instalments, including interest, payable on
maturity to the Oberschlesische Stickstoffwerke A.-G. and to the Bayerische Stickstoffwerke A.-G. ;
(c) that from the date of judgment, interest at 6 % per annum should be paid by the Polish Government; [p13]
(d) that the Polish Government is not entitled to set off against the above-mentioned claim for indemnify of the German Government, its
claim in respect of social insurances in Upper Silesia; that it may not make use of any other set-off against the said claim for indemnity;
and that the payments mentioned under (a) to (c) should be made without any deduction to the account of the two Companies with the
Deutsche Bank at Berlin;
in the alternative, that set-off is only permissible if the Polish Government puts forward for this purpose a claim in respect of a debt
recognized by the German Government or established by a judgment given between the two Governments.

[31] The Polish Government has made no formal objection to the amendments successively made in the original submissions of the
German Government.
***

[32] The submissions formulated by the Polish Government in reply to those set out in the Application and Case of the German
Government are worded as follows in the Counter-Case:

It is submitted:

[Translation.]
A. In regard to the Oberschlesische:

(1) that the applicant Government's claim should be dismissed;

(2) in the alternative, that the claim for indemnity should be provisionally suspended;
(3) as a further alternative, in the event of the Court awarding some compensation, that such compensation should only be payable: (a)
after the previous withdrawal by the said Company of the action brought by it and pending before the German-Polish Mixed Arbitral
Tribunal in regard to the Chorzów factory and after the formal abandonment by it of any claim against the Polish Government in respect
of the latter's taking possession and exploitation of the Chorzów factory; (b) when the civil action brought against the said Company by
the Polish Government in respect of the validity of the entry of its title to ownership in the land register has been finally decided in
favour of the Oberschlesische.
(4) In any case, it is submitted that the German Government should, in the first place, hand over to the Polish Government the whole of
the shares of the Oberschlesische [p14] Stickstoffwerke Company, of the nominal value of 110,000,000 Marks, which are in its hands
under the contract of December 24th, 1919.

B. In regard to the Bayerische:

(1) (a) that the applicant Government’s claim for compensation in respect of the past, in excess of 1,000,000 Reichsmarks, should be
dismissed;
(b) that, pro futuro, an annual rent of 250,000 Reichsmarks, payable as from January 1st, 1928, until March 31st, 1941, should be
awarded;
(c) that these indemnities should only be payable after previous withdrawal by the said Company of the claim pending before the
German-Polish Mixed Arbitral Tribunal in respect of the Chorzów factory and after the formal abandonment by it of any claim against
the Polish Government in respect of the latter's taking possession and exploitation of the Chorzów factory ;
(2) that the applicant Government's third submission to the effect that until June 30th, 1931, no exportation of nitrated lime or nitrate of
ammonia should take place to Germany, the United States of America, France or Italy, should be dismissed.

C. In regard to the Oberschlesische and Bayerische jointly:

that submission No. 4 – to the effect that it is not permissible for the Polish Government to set off, against the abovementioned claim
for indemnity of the German Government, its claim in respect of social insurances in Upper Silesia, that it may not make use of any
other set-off against the abovementioned claim for indemnity, and that the payments mentioned under 4 (a)-(c) should be made without
any deduction to the account of the two Companies with the Deutsche Bank at Berlin-should be rejected.

[33] These submissions have not subsequently been amended except that submission A, 3 (b), was withdrawn by means of a
declaration contained in the written Rejoinder.

[34] The German Government having disputed the right of the Polish Government to withdraw this submission (the rejection of which
had been demanded by the former) at the stage of the proceedings reached when the withdrawal took place, the latter Government
maintained its withdrawal.

[35] For the reasons given above, the Court holds that there is nothing to prevent the Polish Government for its part from [p15]
amending its original submissions, especially seeing that this amendment occurred while the written proceedings were still in progress
and took the form of the abandonment of a part of its submissions. In the Court's opinion, the second of the "additional claims" of the
German Government mentioned above, was doubtless designed to meet the Polish submission which has been thus abandoned.

[36] The Court therefore considers that the final submissions of the Polish Government may be set down as under:

"It is submitted :

A. As regards the Oberschlesische:

(1) that the claim of the applicant Government should be dismissed;

(2) in the alternative, that the claim for indemnity should be provisionally suspended;
(3) as a further alternative, in the event of the Court awarding some compensation, that such compensation should only be payable
after the previous withdrawal by the said Company of the action brought by it and pending before the German-Polish Mixed Arbitral
tribunal in regard to the Chorzów factory, and after the formal abandonment by it of any claim against the Polish Government in respect
of the latter's taking possession and exploitation of the Chorzów factory.
(4) In any case, it is submitted that the German Government should, in the first place, hand over to the Polish Government the whole of
the shares of the Oberschlesische Stickstoffwerke Company, of the nominal value of 110,000,000 Marks, which are in its hands under
the contract of December 24th, 1919.

B. As regards the Bayerische:

(1) (a) that the applicant Government's claim for compensation in respect of the past, in excess of 1,000,000 Reichsmarks, should be
dismissed;
(b) that, pro futuro, an annual rent of 250,000 Reichsmarks, payable as from January 1st, 1928, until March 31st, 1941, should be
awarded;
(c) that. these indemnities should only be payable after previous withdrawal by the said Company of the claim pending before the
German-Polish Mixed Arbitral [p16] Tribunal in respect of the Chorzów factory and after the formal abandonment by it of any claim
against the Polish Government in respect of the latter's taking possession and exploitation of the Chorzów factory;
(2) that the applicant Government's third submission to the effect that until June 30th, 193,I, no exportation of nitrate of lime or nitrate of
ammonia should take place to Germany, the United States of America, France or Italy.

C. As regards the Oberschlesische and Bayerische jointly:

that submission No. 4-to the effect that it is not permissible for the Polish Government to set off against the abovementioned claim for
indemnity of the German Government its claim in respect of social insurances in Upper Silesia, that it may not make use of any other
set-off against the abovementioned claim for indemnity, and that the payments mentioned under 4 (a)-(c) should be made without any
deduction to the account of the two Companies with the Deutsche Bank at Berlin-should be rejected.

***
[37] A comparison between the German and Polish final submissions as thus set out leads to the following results :

I. (A) as regards the first German submission: that the Parties are at variance except in regard to the reparation of the damage
sustained by the Bayerische;
(B) as regards submission No. 2 a of the German Government that the Polish Government asks that it should be dismissed ; and, in
the alternative, that the claim for indemnity should be provisionally suspended; it is doubtless the alternative claim thus put forward by
Poland in reply to submission No. 2 a of the German Government that the first of the "additional claims" of the latter Government
mentioned above is intended to meet;
(C) as regards submission No. 2 b of the German Government: that the Polish Government asks that it should be dismissed except as
regards the award, in respect of [p17] the past, of a sum not exceeding 1,000,000 Reichsmarks for the future, of an annual rent of
250,000 Reichsmarks payable as from January 1st, 1928, until March 31st, 1941;
(D) as regards the German submission No. 3: that the Polish Government asks that the German Government's principal submission
should be dismissed but does not formulate a definite submission with regard to the alternative submission under this number;
(E) as regards the German submissions Nos. 4 (a)-(c): that the Polish Government does not say anything specific concerning these
submissions except in so far as it formulates its submission A 3, regarding the suspension of payment;
(F) as regards the German Government's submission No. 4 (d): that the Polish Government submits that the principal submission
under this number should be rejected, but does not formulate any definite submission regarding the alternative German submission.
II. As regards the Polish submissions: that submission A 4, which goes beyond the scope of the German submissions, has given rise to
a claim for its rejection on the part of 'the German Government, formulated during the oral proceedings.

***

[38] It is therefore solely with the points of divergence as set out above that the Court has to deal in the judgment which it is about to
deliver. It is true that the Parties have, both in the written and oral proceedings, formulated yet other claims. In so far, however, as
these claims do not constitute developments of the original submissions, or alternatives to them, the Court cannot regard them
otherwise than - to use the expression of the Agent of the German Government-as "subsidiary arguments" or as mere suggestions as
to the procedure to be adopted; this is certainly the case as regards the numerous requests with a view to the consultation of experts or
the hearing of witnesses. There is no occasion for the Court [p18] to pass upon all these requests; it may therefore confine itself to
taking them into account, in so far as may be necessary during the discussion of the arguments advanced by the parties in support of
their submissions, for the purposes of stating the reasons of the judgment.

***

[39] The Parties have presented to the Court numerous documents either as annexes to the documents of the written proceedings or in
the course of the hearings, or, lastly, in response to requests made or questions put by the Court. (Annex.)

THE FACTS.

[40] The facts underlying the present suit have already been succinctly stated or referred to in judgments Nos. 6, 7, 8 and 11, given by
the Court on August 25th, 1925, May 25th, 1926, July 26th, 1927, and December 16th, 1927.

[41] The present judgment, however, must deal with the so-called case of the factory at Chorzów from a point of view with which the
Court has not hitherto had to concern itself, namely, that of the nature - and, if necessary, the amount and method of payment - of the
reparation which may be due by Poland in consequence of her having, as established by the Court in Judgment No. 7, adopted an
attitude not in conformity with the Geneva Convention of May 13th, 1922. Accordingly, it is necessary, before approaching the point of
law raised by the German Application of February 8th, 1927, briefly to trace out the relevant facts from this particular standpoint.
[42] On March 5th, 1915, a contract was concluded between the Chancellor of the German Empire, on behalf of the Reich, and the
Bayerische, according to which that Company undertook "to establish for the Reich and forthwith to begin the construction of", amongst
other things, a nitrate factory at Chorzów in Upper Silesia. The necessary lands were to be acquired on [p19] behalf of the Reich and
entered in its name in the land register. The machinery and equipment were to be in accordance with the patents and licences of the
Company and the experience gained by it, and the Company undertook to manage the factory until March 31st, 1941, making use of all
patents, licences, experience gained, innovations and improvements, as also of all supply and delivery contracts of which it had the
benefit. For this purpose, a special section of the Company was to be formed which was, to a certain extent, to be subject to the
supervision of the Reich, which had the right to a share of the profits resulting from the working of the factory during each financial
year. The Reich had the right, commencing on March 31st, 1926, to terminate the contract for the management of the factory by the
Company on March 31st of any year upon giving fifteen months' notice. The contract could be determined as early as March 31st,
1921, always on condition of fifteen months' notice being given, if the Reich's share of the surplus did not reach a fixed level.

[43] This contract was subsequently supplemented by a series of seven additional contracts, of which, however, only the second and
seventh, concluded on November 16th, 1916, and November 22nd, 1918, respectively, relate to the Chorzów factory. On May 14th,
1919, the Bayerische brought an action against the Reich, claiming that the latter was bound to compensate the Company for the
damage said to have been suffered by it, owing to certain alleged shortcomings with respect to the fulfilment of the contract of March
5th, 1913, and the additional contracts. This matter was, however, settled out of court by an arrangement concluded on October 24th,
1919, between the Reich and the Bayerische, an arrangement which replaced the fifth additional contract and did not relate to the
Chorzów factory.

[44] On December 24th, 1919, a series of legal instruments were signed and legalized at Berlin with a view to the formation of a new
Company, the Oberschlesische Stickstoffwerke A.-G., with a share capital of 250,000 marks, increased subsequently to 110 millions of
marks, and the sale by the Reich to this Company of the factory at Chorzów, that is to say, the whole of the land, buildings and
installations belonging thereto, with all accessories, reserves, raw material, equipment and stocks. The [p20] management and working
of the factory were to remain in the hands of the Bayerische, which, for this purpose, was to utilize its patents, licences, experience
gained and contracts. These relations between the two Companies were confirmed by means of letters dated December 24th and 28th,
1919, exchanged between them. The Oberschlesische was duly entered, on January 29th, 1920, at the Amtsgericht of Königshütte, in
the Chorzów land register, as owner of the landed property constituting the nitrate factory at Chorzów. The registered office of the
Oberschlesische which, under the memorandum of association, was established at Chorzów, was subsequently, by an amendment
executed on January 14th, 1920, transferred to Berlin.

[45] In the contract of December 24th, 1919, between the Reich and the newly created Oberschlesische, a second limited liability
company, founded the same day and known as the Stickstoff Treuhand Gesellschaft m. b. H. (hereinafter called the "Treuhand") was
also concerned. This Company had a share capital of 300,000 marks, subsequently increased to 1,000,000 marks. Under the contract,
the whole of the factory for the production of nitrated lime, with the accessory installations, situated at Chorzów, was ceded by the
Reich to the Oberschlesische at the price of approximately 110 million marks, - which price was calculated according to certain data
indicated in the contract itself, - the Treuhand taking over, in the place of the Oberschlesische, as sole and independent debtor, all the
obligations imposed by the contract upon the latter in regard to the Reich, and obtaining in consideration thereof, without payment,
shares of the Oberschlesische - to the nominal value of 109,750,000 marks. Later, the Treuhand also acquired the rest of the shares of
the Oberschlesische, thus becoming the sole shareholder of that Company. As guarantee for the sums due to the Reich under the
contract, the Treuhand undertook to obtain for the Reich a lien on all the shares of the Oberschlesische. The Treuhand was to liquidate
the purchase price exclusively by paying to the Reich the dividends on the shares of the Oberschlesische. Nevertheless, the Treuhand
was authorized to pay at any time the whole or a part of the purchase price ; this would have the effect of removing the lien on shares
of a nominal value corresponding to the payment [p21] made. The Reich was authorized itself to exercise all the rights resulting from
the possession of the shares, and in particular the right to vote at the general meeting of shareholders, but agreed that the
management. of the exploitation of the Oberschlesische should be left in the hands of the Bayerische. An alienation of the shares so
pledged would be authorized only with the approval of the Reich, even after the lien had expired. As a guarantee for the fulfilment of
this obligation, the Reich would, even after expiration of the lien, retain possession of the shares and the exercise of all rights resulting
from such possession. The price realized in the event of a sale of the shares was in the first place to be devoted to the liquidation of the
balance of the Reich's claim. Of any surplus, the Reich was to receive either 85% - If the sale were effected by the Treuhand - or 90% -
if it were effected by the Reich; in both cases, the balance only would fall to the Treuhand which, however, in the second case, would
obtain a right to acquire the shares at the price at which the Reich wished that they should be disposed of.

[46] On May 15th, 1922, was signed at Geneva between Germany and Poland the Convention concerning Upper Silesia.

[47] After the signature of this Convention but before the actual cession of Polish Upper Silesia to Poland, the Treuhand, by a letter
dated May 26th, 1922, offered to a Swiss company, the Compagnie d'azote et de fertilisants S. A. at Geneva, an option until the end of
the year for the purchase, at a price of five million Swiss francs, to be paid by January 2nd, 1923, at latest, of one half (55 million
marks) of the shares of the Oberschlesische, in consideration of which the Genevese Company would, amongst other things, acquire
the right to take part in the negotiations with the Polish Government. This offer came to nothing.

[48] On July 1st, 1922, the Polish Court of Huta Krolewska, which had replaced the Amtsgericht of Königshütte, gave a decision to the
effect that the registration with this Court of the Oberschlesische as owner of the factory, which was declared null and void, was to be
cancelled and the previously existing situation restored and that the right of ownership in the landed property in question was to be
registered in the name of the [p22] Polish Treasury. This decision, which cited Article 256 of the Treaty of Versailles and the Polish
laws of July 14th, 1920, and June 16th, 1922, was carried into effect on the same day.

[49] On July 3rd, 1922, M. Ignacy Moscicki, who was delegated with full powers to take charge of the factory at Chorzów by a Polish
ministerial decree of June 24th, 1922, took possession of the factory and took over the management in accordance with the terms of
the decree. The German Government contended, and the Polish Government did not deny, that the said delegate, in undertaking the
control of the working of the factory, at the same time took possession of the movable property, patents, licences, etc.

[50] After having taken over the factory, the Polish Government entered it in the list of property transferred to it under Article 256 of the
Treaty of Versailles, which list was duly communicated to the Reparation Commission. The Polish Government alleges that after the
pronouncement of Judgment No. 7 by the Court, the German Government asked that the factory should be struck out of the list in
question; the former Government has not, however, been informed whether this has been done.

[51] In the meantime, the Oberschlesische, on November I5th, 1922, had brought an action before the German-Polish Mixed Arbitral
Tribunal at Paris, claiming, amongst other things, that the Polish Government should be ordered to restore the ,factory. This action,
notice of which was served upon the respondent Government on January 17th, 1923, was withdrawn by the Oberschlesische in June
1928, before the Tribunal had been able to give a decision.

[52] The Oberschlesische, on November 24th, 1922, instituted a parallel action in regard to the movable property existing at Chorzów
at the time of the taking over of the factory, against the Polish Treasury before the Civil Court of Katowice, with a view to obtaining
either the restitution to the Oberschlesische or the Bayerische of such property, or the payment of the equivalent value. This action
however led to no decision on the merits.

[53] As regards the Bayerische, that Company also, on March 25th, 1925, brought an action before the German-Polish Mixed [p23]
Arbitral Tribunal against the Polish Treasury with a view to obtaining an annual indemnity until the restitution of the factory to the
Oberschlesische, and to causing the possession and management of the factory to be restored to it. Notice of this action was served
on the respondent Government on December 16th, 1925 ; but the case was withdrawn in June 1928, at the same time as the action
brought by the Oberschlesische and in the same circumstances.

[54] The Court's Judgment No. 7 was given on May 75th, 1926. This judgment was the source of developments tending in two different
directions.

[55] On the one hand, at the initiative of the German Government, it formed the starting point for direct negotiations between the two
Governments concerned. In regard to these negotiations, it is only necessary here to note that, on January 14th, 1927, the German
Government had recognized that the factory could no longer be restored in kind and that consequently the reparation due must, in
principle, take the form of the payment of compensation, a statement which is moreover formally repeated in the Case. The
negotiations were unsuccessful owing, amongst other things, to the fact that, in the opinion of the Polish Government, certain claims
which Poland was said to have against Germany, must be set off against the indemnity to be awarded to Germany. The failure of the
negotiations resulted in the institution of the present proceedings.

[56] On the other hand, the Court's Judgment No. 7 gave rise on the part of the Polish Government to the bringing of an action before
the Polish Court of Katowice against the Oberschlesische in order to obtain a declaration that that Company had not become owner of
the landed property at Chorzów; that the entry in the land register made in its favour on January 29th, 1922, was not valid, and that-
independently of the laws of July 14th, 1920, and June 16th, 1922, - the ownership of the landed property in question fell to the Polish
Treasury. The judgment of the Court in this action¬ which was given by default - was published on November 12th, 1927, and took
effect on January 2nd, 1928 ; it admitted all the submissions of the claimant. [p24]

[57] Meanwhile, on October 18th, 1927, the Court had received a fresh application from the German Government which, relying on the
terms of Article 60 of the Statute and Article 66 of the Rules of Court, prayed the Court to give an interpretation of its Judgments Nos.
7, of May 25th, 1926, and 8, of July 26th, 1927, alleging that a divergence of opinion had arisen between the two Governments in
regard to the meaning and scope of these two judgments in connection with the point which had given rise to the proceedings before
the Court of Katowice.

[58] The Court, on December 16th, 1927, delivered its judgment in this suit (No. II). According to this judgment the Court's intention in
Judgment No. 7 had been to recognize, with binding effect between the Parties concerned and in respect of that particular case,
amongst other things, the right of ownership of the Oberschlesische in the Chorzów factory under municipal law.

[59] Whilst the proceedings in connection with the request for an interpretation were in progress, the German Government, by means
of a Request dated October 14th, 1927, and filed with the Registry on November 15th, besought the Court to indicate to the Polish
Government that it should pay to the German Government, as a provisional measure, the sum of 30 million Reichsmarks.

[60] The Court gave its decision upon this request, which was submitted under the terms of Article 41 of the Statute, in the form of an
Order made on November 21st, 1927. It held that effect could not be given to the request of the German Government, since it was to
be regarded as designed to obtain not the indication of measures of protection, but judgment in favour of a part of the claim formulated
in the Application of February 8th, 1927. [p25]

***

THE LAW.

I.

[61] The Court, before proceeding to consider the Parties' submissions, must determine the import of the application which has given
rise to the present proceedings, in order to ascertain its nature and scope. In the light of the results of this investigation, it will then
proceed to consider the submissions made in the course of the written and oral proceedings.

[62] In the application the Court is asked:

(1) to declare that the Polish Government, by reason of its attitude in respect of the Oberschlesische and Bayerische Companies,
which attitude the Court had declared not to be in conformity with the Geneva Convention, is under an obligation to make good the
consequent damage sustained by those Companies;
(2) to award compensation, the amount of which is indicated in the application, for the damage caused to each of the respective
Companies;
(3) to fix the method of payment, and amongst other things to order the payments to be made by the Polish Government to be effected
to the account of the two Companies with the Deutsche Bank at Berlin.

[63] In the course of the oral proceedings, a difference of opinion between the two Parties became apparent as to the nature and scope
of the application. The Agent for the German Government argued in his address to the Court that a government may content itself with
reparation in any form which it may consider proper, and that reparation need not necessarily consist in the compensation. of the
individuals concerned. The following passage should especially be noted:

[Translation.]
"It is in fact a question of the German Government's own rights. The German Government has not brought this suit as representative of
the individuals who have suffered injury, but it may estimate the damage for which it claims reparation on its own behalf, according to
the measure provided by the losses suffered by the companies whose case it has [p26] taken up. The German Government may claim
the payment of this compensation at any locus solutionis which it may think fit in this case, whether it be a public or a private office.

The present dispute is therefore a dispute between governments and nothing but a dispute between governments. It is very clearly
differentiated from an ordinary action for damages, brought by private persons before a civil court, as the Polish Government has said
in its Rejoinder."

[64] The Agent for the Polish Government in his Rejoinder submitted that this method of regarding the question involved a modification
of the subject of the dispute and, in some sort also, of the nature of the application, for, according to Poland's view, the subject of the
dispute had been defined by Germany as the obligation to compensate the two Companies. But damage and compensation being
interdependent conceptions, the German claim assumed another aspect if it was no longer a question of compensating the
Companies, but of compensating the State for the injury suffered by it. The Agent for the Polish Government disputed the German
Government's right to make this change at that stage of the proceedings and refused to accept it.

[65] Even should it be possible to construe the terms of the application and of the subsequent submissions of the Applicant as
contemplating compensation due directly to the two Companies for damages suffered by them and not reparation due to Germany for a
breach of the Geneva Convention, it follows from the conditions in which the Court has been seized of the present suit, and from the
considerations which led the Court to reserve it by Judgment No. 8 for decision on the merits, that the object of the German application
can only be to obtain reparation due for a wrong suffered by Germany in her capacity as a contracting Party to the Geneva Convention.

[66] The present application is explicitly and exclusively based on Judgment No. 7 which declared that the attitude of the Polish
Government in respect of the two Companies, the Oberschlesische and Bayerische, was not in conformity with, Article 6 and the
following articles of the said Convention. Already in Judgment No. 6, establishing the Court's jurisdiction to deal with the alleged
violation of the Geneva Convention, the [p27] Court recognized that - as had been maintained by the Applicant - the matter was
exclusively a dispute between States as to the interpretation and application of a convention in force between them. Article 23 of the
Geneva Convention only contemplates differences of opinion respecting the interpretation and application of Articles 6 to 22 of the
Geneva Convention arising between the two Governments. The Court in fact declared itself competent to pass upon the claim for
reparation because it regarded reparation as the corollary of the violation of the obligations resulting from an engagement between
States. This view of the matter, which is in conformity with the general character of an international tribunal which, in principle, has
cognizance only of interstate relations, is indicated with peculiar force in this case for the specific reason that the Geneva Convention,
with its very elaborate system of legal remedies, has created or maintained for certain categories of private claims arbitral tribunals .of
a special international character, such as the Upper Silesian Arbitral Tribunal and the German-Polish Mixed Arbitral Tribunal. It was on
the basis, amongst other things, of. the purely interstate character of the dispute decided by Judgment No. 7 that the Court reserved
the case for judgment, notwithstanding the fact that actions brought by the two Companies were pending before one of the arbitral
tribunals above mentioned, actions which related to the same act of dispossession which led to the filing with the Court of the German
Government's Application now before it.

[67] The Court, which by Judgment No. 8 reserved the present application for judgment on the merits, could only do so on the grounds
on which it had already based its Judgment No. 7 which constitutes the starting point for the claim for compensation now put forward
by Germany. Accordingly the declarations of the Applicant in the present proceedings must be construed in the light of this conception
and this method must also have been followed even if that Party had not stated its contention as explicitly as it has done in the German
Agent's address to the Court.

[68] It is a principle of international law that the reparation of a wrong may consist in an indemnity corresponding to the damage which
the nationals of the injured State have suffered [p28] as a result of the act which is contrary to international law. This is even the most
usual form of reparation; it is the form selected by Germany in this case and the admissibility of it has not been disputed. The
reparation due by one State to another does not however change its character by reason of the fact that it takes the form of an
indemnity for the calculation of which the damage suffered by a private person is taken as the measure. The rules of law governing the
reparation are the rules of international law in force between the two States concerned, and not the law governing relations between
the State which has committed a wrongful act and the individual who has suffered damage. Rights or interests of an individual the
violation of which rights causes damage are always in a different plane to rights belonging to a State, which rights may also be
infringed by the same act. The damage suffered by an individual is never therefore identical in kind with that which will be suffered by a
State; it can only afford a convenient scale for the calculation of the reparation due to the State.

[69] International law does not prevent one State from granting to another the right to have recourse to international arbitral tribunals in
order to obtain the direct award to nationals of the latter State of compensation for damage suffered by them as a result of infractions of
international law by the first State. But there is nothing - either in the terms of Article 23 or in the relation between this provision and
certain others of a jurisdictional character included in the Geneva Convention - which tends to show that the jurisdiction established by
Article 23 extends to reparation other than that due by one of the contracting Parties to the other in consequence of an infraction of
Articles 6 to 22, duly recognized as such by the Court.

[70] This view is moreover readily reconcilable with the submissions of the Applicant. The first of its submissions, throughout all stages
of the proceedings, aims at the establishment of an obligation to make reparation. The indemnities to be paid to the German
Government, according to No. 2 of the final submissions, constitute, in the terms of submission 4d, as set out in both the Case and the
oral reply, a debt due to that Government. The claim formulated in the same submission, to the effect that payment should be made to
the account of the [p29] two Companies with the Deutsche Bank at Berlin, is interpreted by the Agent for the German Government as
solely relating to the locus solutionis.

[71] The Court therefore is of opinion that the Applicant has not altered the subject of the dispute in the course of the proceedings.

***

[72] It follows from the foregoing that the application is designed to obtain, in favour of Germany, reparation the amount of which is
determined by the damage suffered by the Oberschlesische and Bayerische. Three fundamental questions arise:

(1) The existence of the obligation to make reparation.

(2) The existence of the damage which must serve as a basis for the calculation of the amount of the indemnity.
(3) The extent of this damage.

[73] As regards the first point, the Court observes that it is a principle of international law, and even a general conception of law, that
any breach of an engagement involves an obligation to make reparation. In Judgment No. 8, when deciding on the jurisdiction derived
by it from Article 23 of the Geneva Convention, the Court has already said that reparation is the indispensable complement of a failure
to apply a convention, and there is no necessity for this to be stated in the convention itself. The existence of the principle establishing
the obligation to make reparation, as an element of positive international law, has moreover never been disputed in the course of the
proceedings in the various cases concerning the Chorzów factory.

[74] The obligation to make reparation being in principle recognized, it remains to be ascertained whether a breach of an international
engagement has in fact taken place in the case under consideration. Now this point is res judicata. The nonconformity of Poland's
attitude in respect of the two Companies with Article 6 and the following articles of the Geneva Convention is established by No. 2 of
the operative provisions of Judgment No. 7. The application of the principle to the present case is therefore evident. [p30]

[75] As regards the second point, the question whether damage has resulted from the wrongful act which is common ground, is in no
wise settled by the Court's previous decisions relating to the Chorzów case. The Applicant having calculated the amount of the
reparation claimed on the basis of the damage suffered by the two Companies as a result of the Polish Government's attitude, it is
necessary for the Court to ascertain whether these Companies have in fact suffered damage as a consequence of that attitude.

[76] As regards the Bayerische, Poland admits the existence of a damage affording ground for reparation; the Parties only differ as to
the extent of this damage and the mode of reparation; on the other hand, Poland denies the existence of any damage calling for
reparation in the case of the Oberschlesische and consequently submits that Germany's claim should be dismissed. The fact of the
dispossession of the Oberschlesische is in no way disputed. But notwithstanding this, in the contention of the Polish Government, that
Company has suffered no damage: it argues, first, that the right of ownership claimed by the Oberschlesische was null and void or
subject to annulment, and, secondly, that the contract of December 24th, 1919, attributed to the Reich rights and benefits so
considerable that any possible damage would not materially affect the Company. In the alternative, the Polish Government contends
that these same circumstances at all events have the effect of essentially diminishing the extent of the damage to be taken into
account in so far as the said Company is concerned.

[77] Apart from these preliminary objections, the Parties are at issue as to the amount and method of payment of any compensation
which may be awarded.

[78] In these circumstances, the Court must first of all consider whether damage affording ground for reparation has ensued as regards
not only the Bayerische but also the Oberschlesische. [p31]

II.

[79] On approaching this question, it should first be observed that, in estimating the damage caused by an unlawful act, only the value
of property, rights and interests which have been affected and the owner of which is the person on whose behalf compensation is
claimed, or the damage done to whom is to serve as a means of gauging the reparation claimed, must be taken into account. This
principle, which is accepted in the jurisprudence of arbitral tribunals, has the effect, on the one hand, of excluding from the damage to
be estimated, injury resulting for third parties from the unlawful act and, on the other hand, of not excluding from the damage the
amount of debts and other obligations for which the injured party is responsible. The damage suffered by the Oberschlesische in
respect of the Chorzów undertaking is therefore equivalent to the total value - but to that total only - of the property, rights and interests
of this Company in that undertaking, without deducting liabilities.

[80] The Polish Government argues in the first place that the Oberschlesische has suffered no loss as a result of its dispossession,
because it was not the lawful owner, its right of ownership having never been valid and having in any case ceased to be so in virtue of
the judgment given on November 12th, 1927, by the Court of Katowice; so that from that date at all events no damage for which
reparation should be made could ensue as regards that Company.

[81] In regard to this the Court observes as follows: the Court has already, in connection with Judgment No. 7, had to consider as an
incidental and preliminary point, the question of the validity of the transactions in virtue of which the ownership of the Chorzów factory
passed from the Reich to the Oberschlesische. It then arrived at the conclusion that the various transactions in question were genuine
and bona fide; that is why it was able to regard the Chorzów factory as belonging to a company controlled by German nationals,
namely, the Oberschlesische. Whatever the effect of this incidental decision may be as regards the right of ownership under municipal
law, it is evident that the fact that the [p32] Chorzów factory belonged to the Oberschlesische was the necessary condition precedent to
the Court's decision that the attitude of the Polish Government in respect of the Oberschlesische was not in conformity with Article 6
and the following articles of the Geneva Convention. For if the factory did not belong to the Oberschlesische Stickstoffwerke, not only
would that Company not have suffered damage as a result of dispossession, but furthermore it could not have been subjected to a
dispossession contrary to the Geneva Convention, but the Court established by Judgment No. 7 that such was the case. It should be
noted that the Court in Judgment No. 7 has not confined itself to recording the incompatibility with the Geneva Convention of the
application of the law of July 14th, 1920, to properties entered in the land register in the name of companies controlled by German
nationals, but has, in replying to the objections put forward by the Respondent, also had to deal with the question whether such entry
was the outcome of fictitious and fraudulent transactions or of genuine and bona-¬fide transactions. Poland herself objected in
connection with the second submission of the German Application of May 15th, 1925, that the entry of the Oberschlesische in the land
register was in any case not valid as it was based on a fictitious and fraudulent transaction and thus caused the Court to deal with this
point.

[82] As the application now under consideration is based on the damage established by Judgment No. 7, it is impossible that the
Oberschlesische's right to the Chorzów factory should be looked upon differently for the purposes of that judgment and in relation to
the claim for reparation based on the same judgment. The Court, having been of opinion that the Oberschlesische's right to the
Chorzów factory justified the conclusion that the Polish Government's attitude in respect of that Company was not in conformity with
Article 6 and the following articles of the Geneva Convention, must necessarily maintain that opinion when the same situation at law
has to be considered for the purpose of giving judgment in regard to the reparation claimed as a result of the act which has been
declared by the Court not to be in conformity with the Convention.

[83] The Polish Government now points out that, after Judgment No. 7 had been rendered, the Civil Court of Katowice [p33] which,
under International Law, doubtless has jurisdiction in disputes at civil law concerning immovable property situated within its district, has
declared the entry of the Oberschlesische in the land register as owner not to be valid under the municipal law applicable to the case,
and this apart from the Polish laws of July 14th, 1920, and June 16th, 1922; it further contends that the Court, in now giving judgment
on the question of damages, should bear in mind this new fact.

[84] There is no need for the Court to consider what would have been the situation at law as regards the Geneva Convention, if
dispossession had been preceded by a judgment given by a competent tribunal. It will suffice to recall that the Court in Judgment No. 8
has said that the violation of the Geneva Convention consisting in the dispossession of an owner protected by Article 6 and following of
the Geneva Convention could not be rendered non-existent by the judgment of a municipal court which, after dispossession had taken
place, nullified the grounds rendering the Convention applicable, which grounds were relied upon by the Court in Judgment No. 7. The
judgment of the Tribunal of Katowice given on November 12th, 1927, - which judgment was given by default as regards the
Oberschlesische, the Reich not being a Party to the proceedings, - does not contain in the text known to the Court the reasons for
which the entry of the property in the name of the Oberschlesische was declared null and void; but it appears from the application upon
which this judgment was given that the reasons advanced by the Polish Treaty are essentially the same as those already discussed
before the Court on the basis of the Polish Government's submissions in the proceedings leading up to Judgment No. 7, which
reasons, in the opinion of the Court, did not suffice to show that the Oberschlesische did not fall within the scope of Article 6 and the
following articles of the Geneva Convention. If the Court were to deny the existence of a damage on the ground that the factory did not
belong to the Oberschlesische, it would be contradicting one of the reasons on which it based its Judgment No. 7 and it would be
attributing to a judgment of a municipal court power indirectly to invalidate a judgment of an international court, which is impossible.
Whatever the [p34] effect of the judgment of the Tribunal of Katowice of November 12th, 1927, may be at municipal law, this judgment
can neither render inexistent the violation of the Geneva Convention recognized by the Court in Judgment No. 7 to have taken place,
nor destroy one of the grounds on which that judgment is based.

[85] It is to the objection dealt with above and to a submission connected therewith which the Polish Government made in its Counter-
Case but subsequently withdrew, that the following submission of the German Government relates:

[Translation.]
that the obligation of the Polish Government to pay the indemnity awarded by the Court is in no way set aside by a judgment given or
to be given by a Polish municipal court in a suit concerning the question of the ownership of the factory situated at Chorzów.

[86] This submission has been maintained notwithstanding the withdrawal of the Polish submission referred to.
[87] The Court, being of opinion that this latter submission is to be regarded as having been validly withdrawn, but that, nevertheless,
the objection to which it referred still subsists, considers that there is no need expressly to deal with the submission in regard thereto
made by the German Government, save in order to dismiss the submission of the Polish Government based on the judgment of the
Tribunal of Katowice.

***

[88] The Polish Government not only disputes the existence of a damage for the reason that the Oberschlesische is not or is no longer
owner of the factory at Chorzów, but also contends from various points of view that the rights possessed by the Reich in the
undertaking, having passed into the hands of Poland, cannot be included amongst the assets to be taken into account in the
calculation of the damage sustained on which calculation will depend the amount of the reparation due by Poland to Germany.

[89] The Polish Government, admitting, for the sake of argument, that the contract of December 24th, 1919, was not null and void, but
must be regarded as a genuine and valid legal instrument, holds that, according to that contract, the German [p35] Government is the
owner of the whole of the shares of the Oberschlesische representing the sole property of that Company, namely the factory. It
deduces from this that the transaction consists in the transformation of an ordinary State enterprise into a State enterprise with a share
capital, and as it holds that the property of a German company, the whole of the shares of which belong to the Reich, falls within the
category of "property and possessions belonging to the Empire" acquired by Poland under Article 256 of the Treaty of Versailles, it
considers that it is "difficult to see what the rights of the Oberschlesische were which had been infringed by the Polish Government".

[90] In developing this argument, it has laid special stress on the allegation that the Oberschlesische is in reality a company controlled
by the German Government and not a company controlled by German nationals, or even a private enterprise in which the Reich merely
possesses preponderating interests.

[91] Even if this should not be the case and if the instrument of December 24th, 1919, were, for argument's sake, to be regarded as an
effective and genuine contract for the sale of the factory by the Reich to the Oberschlesische, the Polish Government contends that it is
impossible not to take into .account the circumstance that the German State retained a whole complex of rights and interests in the
undertaking. As the indemnity claimed by the German Government is calculated, amongst other things, on the extent of the damage
presumed to have been sustained by the Oberschlesische, it would not be "logically correct to award to that Company compensation
for rights and interests in the Chorzów undertaking which belonged to the Reich". These rights should therefore be eliminated from the
rights of the Oberschlesische, which, if this were done, would amount simply to a nudum jus domini.

[92] The Polish Government also alleges that, under Article 256 of the Treaty of Versailles, the rights and interests of the German
Government in the Chorzów undertaking are transferred to the Polish State, at latest as from the date of the transfer to Poland of
sovereignty over the part of Upper Silesia allotted to her, and that, on the supposition that the .contract of December 24th, 1919, gave
the German State [p36] the whole of the shares of the Oberschlesische, as guarantee for its rights, and to enable it to exercise those
rights, these shares, on the possession of which depend the rights of the Reich, should be transferred to Poland. If the contract of
December 24th, 1919, is to be regarded as genuine and effective, the Polish Government holds that, in order to determine the
indemnity which may be due to the Oberschlesische, the rights of the Reich must first be eliminated; and as it is of opinion that this can
only be done in one way, namely, by the handing over by Germany to Poland of the shares of the Oberschlesische to the nominal
value of 110 million marks, the Polish Government has in regard to this point made the following submission (No. A 4) in its Counter-
Case:

[Translation.]
"In any case, it is submitted that the German Government should, in the first place, hand over to the Polish Government the whole of
the shares of the Oberschlesische Company of the nominal value of 110,000,000 marks, which are in its hands under the contract of
December 24th, 1919."

[93] The German Government in its Reply made the following observations in regard to this submission:

[Translation.]
"In the first place, the Polish Government cites no provision on which it is possible to base the Court's jurisdiction to take cognizance of
this question, which arises from the interpretation of Article 256. In the previous proceedings, the Polish Government strongly
maintained that the interpretation of this article would not be admissible even as a question incidental and preliminary to the
interpretation of Articles 6 to 22 Of the Geneva Convention.

The German Government does not know whether the Polish Government has on mind the general treaty of arbitration signed at
Locarno - according to which any dispute of a legal nature must be submitted to arbitration, and, unless some special arbitral tribunal is
agreed upon, to the Permanent Court of International Justice. But, however that may be, the German Government, being animated by
a wish to ensure that full scope shall be given to the Treaty of Locarno, without pausing to debate questions as to the procedure therein
provided for, and also to see the Chorzów case settled once and for all, abstains from undertaking a detailed examination of the
questions of lack of jurisdiction or prematurity, even though these questions might enter into account in connection with the counter-
claim which, in the German Government's [p37] contention, is formulated in submission A 4 of the Counter-Case. It will simply refer to
Article 40, paragraph 2, No. 4, of the Rules of Court, according to which the Court may give judgment on counter-claims in so far as the
latter come within its jurisdiction. As between Germany and Poland this applies in respect of any question of law in dispute between
them. The only point which might be disputed is the question whether, for the application of this article of the Rules, the conditions
respecting forms and times must also be fulfilled, or whether it is enough that the material conditions should be fulfilled. This point,
however, may be left open, since the German Government accepts the jurisdiction of the Court in regard to the question raised in the
Counter-Case. In the course of the negotiations in regard to the Chorzów case, the German plenipotentiary had already proposed to
the Polish plenipotentiary that this question should be referred to the Court."

[94] In the subsequent proceedings, the Polish Government has not made any statement in regard to the question of the Court's
jurisdiction. It is impossible, therefore, to say whether it accepts the view of the German Government according to which it may be
inferred that such jurisdiction exists under the Convention between Germany and Poland initialled at Locarno on October 16th, 1925, or
whether it contends that the Court has jurisdiction on sortie other basis. In any case, it is certain that it has not withdrawn its claim and
that, consequently, it wishes the Court to give judgment on the submission in question. For its part the German Government, though
basing the Court's jurisdiction on the Locarno Convention, seems above all anxious that the Court should give judgment on the
submission in the course of the present proceedings.

[95] The Parties therefore are agreed in submitting to the Court for decision the question raised by this submission. As the Court has
said in Judgment No. 12, concerning certain rights of minorities in Upper Silesia, Article 36 of the Statute establishes the principle that
the Court's jurisdiction depends on the will of the Parties ; the Court therefore is always competent once the latter have accepted its
jurisdiction, since there is no dispute which States entitled to appear before the Court cannot refer to it, save in exceptional cases
where a dispute may be within the exclusive jurisdiction of some other body. [p38]

[96] But this is not the case as regards the submission in question.

[97] The Court also observes that the counter-claim is based on Article 256 of the Versailles Treaty, which article is the basis of the
objection raised by the Respondent, and that, consequently, it is juridically connected with the principal claim.

[98] Again, Article 40 of the Rules of Court, which has been cited by the German Government, lays down amongst other things that
counter-cases shall contain:

“4º conclusions based on the facts stated ; these conclusions may include counter-claims, in so far as the latter come within the
jurisdiction of the Court."

[99] The claim having been formulated in the Counter-Case, the formal conditions required by the Rules as regards counter-claims are
fulfilled in this case, as well as the material conditions.

[100] As regards the relationship existing between the German claims and the Polish submission in question, the Court thinks it well to
add the following: Although in form a counterclaim, since its object is to obtain judgment against the Applicant for the delivery of certain
things to the Respondent - in reality, having regard to the arguments on which it is based, the submission constitutes an objection to
the German claim designed to obtain from Poland an indemnity the amount of which is to be calculated, amongst other things, on the
basis of the damage suffered by the Oberschlesische. It is in fact a question of eliminating from the amount of this indemnity a sum
corresponding to the value of the rights and interests which the Reich possessed in the enterprise under the contract of December
24th, 1919, which value, according to the Polish Government, does not constitute a loss to the Oberschlesische because these rights
and interests are said to belong to the Polish Government itself under Article 256 of the Treaty of Versailles. The Court, having by
Judgment No. 8 accepted jurisdiction, under Article 23 of the Geneva Convention, to decide as to the reparation due for the damage
caused to the two Companies by the attitude of the Polish Government towards them, cannot dispense with an examination of the
objections the [p39] aim of which is to show either that no such damage exists or that it is not so great as it is alleged to be by the
Applicant. This being so, it seems natural on the same grounds also to accept jurisdiction to pass judgment on the submissions which
Poland has made with a view to obtaining the reduction of the indemnity to an amount corresponding to the damage actually sustained.

[101] Proceeding now to consider the above-mentioned objections of the Polish Government, the Court thinks it well first of all to define
what is, in its opinion, the nature of the rights which the German Government possesses in respect of the Chorzów under-taking under
the contract of December 24th, 1919, the main features of which have been described above. Referring to this description, the Court
points out that the Treuhand, a not the Reich, is legally the owner of the shares of the Oberschlesische. The Reich is the creditor of the
Treuhand and in this capacity has a lien on the shares. It also has, besides this lien, all rights resulting from possession of the shares,
including the right to the greater portion of the price in the event of the sale of these shares. This right, which may be regarded as
preponderating, is, from an economic standpoint, very closely akin to ownership, but it is not ownership; and even from an economic
point of view it is impossible to disregard the rights of the Treuhand.

[102] Such being the situation at law, to endeavour now to identify the Oberschlesische with the Reich-the effect of which would be that
the ownership of the factory would have passed to Poland under Article 256 of the Treaty of Versailles-would be in conflict with the
view taken by the Court in Judgment No. 7 and reaffirmed above, on which view is based the decision to the effect that Poland's
attitude as regards both the Oberschlesische and Bayerische was not in conformity with the provisions of the Geneva Convention.

[103] The same applies in regard to the contention that the Oberschlesische is a company controlled not by German nationals but by
the Reich. It is true, as the Polish Government has recalled, that the Court in Judgment No. 7 has declared [p40] that there was no
need for it to consider the question whether the Oberschlesische, having regard to the rights conferred by the contract of December
24th, 1919, on the Reich, should be considered as controlled by the Reich, and, should this be the case, what consequences would
ensue as regards the application of the Geneva Convention. But the reason for this was that the Court held that the Polish,
Government had not raised this question, and that, apart from its contention as to the fictitious character of the instruments of
December 24th, 1919, that Government did not seem to have disputed that the Company was controlled by German nationals.
[104] At all events, it is clear that only by regarding the said Company as a company controlled by German nationals within the
meaning of Article 6 of the Geneva Convention, was the Court able to declare that the attitude of the Polish Government towards that
Company was not in conformity with the terms of Article 6 and the following articles of the said Convention.

[105] Even if the question were still open and the Court were now free once more to consider it, it would be bound to conclude that the
Oberschlesische was controlled by the Bayerische. For seeing that, under the contract of December 24th, 1919, the Reich had
declared that it agreed to leave the management of the Chorzów undertaking in the hands of the Bayerische, under the conditions
previously settled with the Reich, and that, under the subsequent contract concluded on November 25th, 1920, between the
Bayerische and the Treuhand, it had been stipulated that for this purpose the Bayerische was to appoint at least two members of its
own board as members of the board of the Oberschlesische, the Court considers that the Bayerische, rather than the Reich, controls
the Oberschlesische.

[106] The Court, therefore, arrives at the conclusion that the Polish contention to the effect that the Oberschlesische has not suffered
damage, because that Company is to be regarded as identifiable with the Reich, and that the property of which the said Company was
deprived by the action of the Polish Government has passed to Poland under Article 256 of the Treaty of Versailles, is not well
founded. [p41]

[107] Alternatively, the Polish Government has contended that, even if the rights possessed by the Reich under the contract of
December 24th, 1919, in the Chorzów undertaking are not to be considered as involving ownership of the shares of the
Oberschlesische, the value of these rights, which fall within the scope of Article 256 of the Treaty of Versailles, should nevertheless be
deducted from the indemnity claimed as regards the Oberschlesische. The Court is likewise unable to admit this contention.

[108] In this respect, it should be noted that Article 256 contains two conditions, namely, that the "property and possessions" with which
it deals must belong to the Empire or to the German States, and that such "property and possessions" must be "situated" in German
territory ceded under the Treaty.

[109] It must therefore be ascertained, amongst other things, whether the rights of the Reich under the contract of December 24th,
1919, are "situated" in the part of Upper Silesia ceded to Poland. In so far as these rights consist in a claim against the Treuhand, it is
clear that this claim cannot be regarded as situated in Polish Upper Silesia, since the Treuhand is a company whose registered office is
in Germany and whose shares belong to companies which also have their registered office in Germany and which are undeniably
controlled by German nationals. The fact that this claim is guaranteed by a lien on the shares on which the profit, as well as the price
obtained in the event of sale, is to be devoted to the payment of this claim, does not, in the Court's opinion, justify the view that. the
rights of the Reich are situated in Polish Upper Silesia where the factory is. These are only rights in respect of the shares; and these
rights, if not regarded as situated where the shares are, must be considered as localized at the registered office of the Company which
in this case in at Berlin and not in Polish Upper Silesia. The transfer of the registered office of the Oberschlesische from Chorzów to
Berlin after the coming into force of the Treaty of Versailles cannot be regarded as illegal and null: [p42] the reasons for which the
Court, in Judgment No. 7, held that alienations of public property situated in the plebiscite zone were not prohibited by that Treaty,
apply a fortiori in respect of the transfer by a company of its registered office from this zone to Germany.

[110] It is also in vain that the Polish Government cites paragraph 10 of the Annex to Articles 297 and 298 of the Treaty of Versailles,
which paragraph lays down that Germany shall deliver "to each Allied or Associated Power all securities, certificates, deeds, or other
documents of title held by its nationals and relating to property, rights or interests situated in the territory of that Allied or Associated
Power, including any shares, stock, debentures, debenture stock, or other obligations of any company incorporated in accordance with
the laws of that Power". Even disregarding the circumstances that the Oberschlesische was constituted under German law and has not
been "incorporated" in accordance with the laws of Poland, the clause quoted has nothing to do with Article 256 and relates only to the
articles to which it is annexed.

[111] Since, as has been shown above, Article 256 of the Treaty of Versailles is not, in the Court's opinion, applicable to the rights
possessed by the Reich under the contract of December 24th, 1919, it follows that the Polish Government's contention-based on the
applicability of that article - to the effect that the value of these rights should be eliminated from the amount of the indemnity to be
awarded, must be rejected. The same is true as regards the Polish Government's submission that the whole of the shares of the
Oberschlesische should be handed over to Poland, a submission the aim of which is precisely to bring about the elimination referred to.
For this submission is likewise based solely on the alleged applicability of the same article of the Treaty of Versailles. [p43]

***

[112] Alternatively, and also in regard to the claim for an indemnity based on the damage sustained by the Oberschlesische, the Polish
Government has asked the Court "provisionally to suspend" its decision on the claim for indemnity.

[113] The reasons for which it seeks this suspension appear to be as follows:

[114] The Polish Government has notified the Reparation Commission of the taking over of the Chorzów factory, under Article 236 of
the Treaty of Versailles, by entering it on the list of German State property acquired under that article. It is for the Reparation
Commission to fix the value of such -property, which value is to be paid to the Commission by the succession State and credited to
Germany on account of the sums due for reparations. Now after the Court had delivered Judgment No. 7, the German Government
asked the Reparation Commission to strike out the Chorzów factory ,from the list of property transferred to Poland, but the Commission
has not yet taken any decision in regard to this. The question whether Poland is to be debited with the value of the factory therefore
remains undecided, and the Polish Government considers that, until this question has been decided .and the Reparation Commission
has struck the Chorzów factory off the list, it - the Polish Government - cannot be compelled to make a payment in favour of the
Oberschlesische.

[115] In addition to these considerations, the Polish Government also cites the Armistice Convention and Article 248 of the Treaty of
Versailles. The latter lays down that, "subject to such exceptions as the Reparation Commission may approve, a first charge upon all
the assets and revenues of the German Empire and its constituent States shall be the cost of reparation and all other costs arising
under the present Treaty or any treaties or agreements supplementary thereto or under arrangements concluded between Germany
and the Allied and Associated Powers during the armistice or its extensions". The Polish Government says that in Judgment No. 7 the
Court has decided first that Poland, not having been a party [p44] to the Armistice Convention, is not entitled to avail itself of the terms
of that instrument in order to establish that the alienation of the factory is null and void, and secondly, that that country cannot, on her
own account, cite Article 248 of the Treaty of Versailles for the same purpose. It would seem, however, that the said Government
contends that, in view of the right which the States signatory to the Armistice Convention may have to oppose the sale of the factory
and in view of the right of the Reparation Commission to ensure the discharge of reparation debts in general and especially in view of
the right reserved to it under Article 248, Poland's obligation to pay to Germany an indemnity in favour of the Oberschlesische is
dependent on the previous approval of the said States and of the Reparation Commission.

[116] The German Government, for its part, whilst disputing the justice of these objections of the Polish Government, has accepted the
jurisdiction of the Court to decide upon them has preliminary points in regard to the questions of form, amount and methods of payment
of the indemnities claimed by it, questions with which the Court has already declared itself competent to deal". It has asked the Court to
dismiss the Polish alternative submission and to decide:

"that the Polish Government is not justified in refusing to pay compensation to the German Government on the basis of arguments
drawn from Article 256 or for motives of respect for the rights of the Reparation Commission or other third parties".

[117] The Court considers that there is no doubt as to its jurisdiction to pass judgment upon the Polish submission in question, but that
this submission must be rejected as not well-founded.

[118] In this respect, it should be observed in the first place that the facts cited by Poland cannot prevent the Court, which now has
before it a claim for indemnity based on its Judgment No. 7, from passing judgment upon this claim in so far as concerns the fixing of
an indemnity corresponding, amongst other things, to the amount of the damage sustained by the Oberschlesische, of which damage
the most important element is represented by the loss of the factory. For the Court, when it declared in Judgment No. 7 that the attitude
[p45] of the Polish Government in regard to the Oberschlesische was not in conformity with the provisions of Article 6 and the following
articles of the Geneva Convention - which attitude consisted in considering and treating the Chorzów factory as acquired by Poland
under Article 256 of the Treaty of Versailles-established that, as between the Parties, that article was not applicable to the Chorzów
factory. Again it appears from the documents submitted to the Court by the Parties that the Reparation Commission does not claim to
be competent to decide whether any particular property is or is not acquired by a succession State under the said article. The
Commission accepts in this respect the solution arrived at in regard to this question either by the means at the disposal of those
concerned - diplomatic negotiations, arbitration, etc. - or as the result of a unilateral act on the part of the succession State itself. The
fact that the Parties are now agreed that Poland must retain the factory has nothing to do with Article 256 of the Treaty of Versailles,
but is owing to the impracticability of returning it. In these circumstances there seems to be no doubt that Poland incurs no risk of
having again to pay the value of the factory to the Reparation Commission, if, in accordance with Germany's claim, she pays this value
to that State.

[119] With regard to the Armistice Convention and Article 248 of the Treaty of Versailles, the question assumes a different aspect. The
Armistice Convention appears to have been cited in order to reserve the possibility of getting the sale of the factory to the
Oberschlesische declared invalid by means of an action to be brought to that end by the States signatory to that Convention. As,
however, the Court, in Judgment No. 7, has held that Poland cannot avail itself of the provisions of the said Convention to which she is
not a party, the Court cannot without inconsistency admit that country's right to invoke the Convention in order to delay making
reparation for the damage resulting from her adoption of an attitude not in conformity with her obligations under the Geneva
Convention.

[120] As has already been said, the Court in Judgment No. 7 has declared that Poland cannot on her own account rely on Article 248
of the Treaty of Versailles in order to obtain the [p46] annulment of the sale of the factory. Furthermore, the Court has stated that this
article does not involve a prohibition of alienation, and that the rights reserved to the Allied and Associated Powers in the article are
exercised through the Reparation Commission. But it would be difficult to understand how these rights could be affected by the
payment to the Reich, as an indemnity, of the value of the factory, seeing that, without such a payment, the rights of the Reich in the
enterprise would probably lose all value. The objection based on this article must therefore also be overruled.

[121] The Court considers that it should confine itself to rejecting the submission whereby the Polish Government asks for a
suspension, since by so doing and by overruling the objections raised by the Polish Government on the basis of Article 256 of the
Treaty of Versailles, it is deciding in conformity with the German submission to the extent that that submission is well-founded; the
Court cannot, in fact, consider the submission in question in so far as it relates to third parties who are not specified.

III.

[122] The existence of a damage to be made good being recognized by the respondent Party as regards the Bayerische, and the
objections raised by the same Party against the existence of any damage that would justify compensation to the Oberschlesische being
set aside, the Court must now lay down the guiding principles according to which the amount of compensation due may be
determined.

[123] The action of Poland which the Court has judged to be contrary to the Geneva Convention is not an expropriation - to render
which lawful only the payment of fair compensation would have been wanting; it is a seizure of property, rights and interests which
could not. be expropriated even against compensation, save under the exceptional conditions fixed by Article 7 of the said Convention.
As the Court has expressly declared in Judgment No. 8, reparation is in this case the consequence not of the application of Articles 6
to 22 of the Geneva Convention, but of acts contrary to those articles. [p47]

[124] It follows that the compensation due to the German Government is not necessarily limited to the value of the undertaking at the
moment of dispossession, plus interest to the day of payment. This limitation would only be admissible if the Polish Government had
had the right to expropriate, and if its wrongful act consisted merely in not having paid to the two Companies the just price of what was
expropriated; in the present case, such a limitation might result in placing Germany and the interests protected by the Geneva
Convention, on behalf of which interests the German Government is acting, in a situation more unfavourable than that in which
Germany and these interests would have been if Poland had respected the said Convention. Such a consequence would not only be
unjust, but also and above all incompatible with the aim of Article 6 and following articles of the Convention - that is to say, the
prohibition, in principle, of the liquidation of the property, rights and interests of German nationals and of companies controlled by
German nationals in Upper Silesia - since it would be tantamount to rendering lawful liquidation and unlawful dispossession
indistinguishable in so far as their financial results are concerned.

[125] The essential principle contained in the actual notion of an illegal act - a principle which seems to be established by international
practice and in particular by the decisions of arbitral tribunals - is that reparation must, as far as possible, wipe-¬out all the
consequences of the illegal act and re-establish the situation which would, in. all probability, have existed if that act had not been
committed. Restitution in kind, or, if this is not possible, payment of a sum corresponding to the value which a restitution in kind would
bear; the award, if need be, of damages for loss sustained which would not be covered by restitution in kind or payment in place of it-
such are the principles which should serve to determine the amount of compensation due for an act contrary to international law.

[126] This conclusion particularly applies as regards the Geneva Convention, the object of which is to provide for the maintenance of
economic life in Upper Silesia on the basis of respect for the status quo. The dispossession of an industrial undertaking - the
expropriation of which is prohibited by the [p48] Geneva Convention - then involves the obligation to restore the undertaking and, if this
be not possible, to pay its value at the time of the indemnification, which value is designed to take the place of restitution which has
become impossible. To this obligation, in virtue of the general principles of international law, must be added that of compensating loss
sustained as the result of the seizure. The impossibility, on which the Parties are agreed, of restoring the Chorzów factory could
therefore have no other effect but that of substituting payment of the value [p49] of the undertaking for restitution ; it would not be in
conformity either with the principles of law or with the wish of the Parties to infer from that agreement that ,the question of
compensation must henceforth be dealt with as though an expropriation properly so called was involved.

***

[127] Such being the principles to be followed in fixing the compensation due, the Court may now consider whether the damage to be
made good is to be estimated separately for each of the two Companies, as the Applicant has claimed, or whether it is preferable to fix
a lump sum.

[128] If the Court were dealing with damage which, though caused by a single act, had affected persons independent the one of the
other, the natural method to be applied would be a separate assessment of the damage sustained by each of them; the total amount of
compensation thus assessed would then constitute the amount of reparation due to the State.

[129] In the present case, the situation is different. The economic unity of the Chorzów undertaking, pointed out by the Court in its
Judgment No. 6, is shown above all in the fact that the interests possessed by the two Companies in the said undertaking are
interdependent and complementary; it follows that they cannot simply be added together without running the risk of the same damage
being compensated twice over; for all that the Bayerische would have obtained from its participation in the undertaking (sums due and
shares in the profits) would have been payable by the Oberschlesische. The value of the Bayerische's option on the factory depended
also on the value of the undertaking. The whole damage suffered by the one or the other Company as the result of dispossession, in so
far as concerns the cessation of the working and the loss of profit which would have accrued, is determined by the value of the
undertaking as such; and, therefore, compensation under this head must remain within these limits.

[130] On the other hand, it is clear that the legal relationship between the two Companies in no way concerns the international
proceedings and cannot hinder the Court from adopting the system of a lump sum corresponding to the value of the undertaking, if, as
is the Court's opinion, such a calculation is simpler and gives greater guarantees that it will arrive at a just appreciation of the amount,
and avoid awarding double damages.

[131] One reservation must, however, be made. The calculation of a lump sum referred to above concerns only the Chorzów
undertaking, and does not exclude the possibility of taking into account other damage which the Companies may have sustained owing
to dispossession but which is outside the undertaking itself. No damage of such a nature has been alleged as regards the
Oberschlesische, and it seems hardly conceivable that such damage should exist, for the whole activity of the Oberschlesische was
concentrated in the undertaking. On the other hand, it is possible that damage of such a nature may be shown to exist as regards the
Bayerische, which possesses or works other factories of the same nature as Chorzów; the Court will consider later whether such
damage must be taken into account in fixing the amount of compensation.
[132] Faced with the task of determining what the sum must be awarded to the German Government in order to enable it to place the
dispossessed Companies as far as possible in the economic situation in which they would probably have been if the seizure had not
taken place, the Court considers that it cannot be satisfied with the data for assessment supplied by the Parties. [p50]

[133] The cost of construction of the Chorzów factory, which the Applicant has taken as a basis for his calculation as regards
compensation to the Oberschlesische, gave rise to objections and criticisms by the Respondent which are perhaps not without some
foundation. Without entering into this discussion and without denying the importance which the question of cost of construction may
have in determining the value of the undertaking, the Court merely observes that it is by no means impossible that the cost of
construction of a factory may not correspond to the value which that factory will have when built. This possibility must more particularly
be considered when, as in the present case, the factory was built by the State in order to meet the imperious demands of public
necessity and under exceptional circumstances such as those created by the war.

[134] Nor yet can the Court, on the other hand, be satisfied with the price stipulated in the contract of December 24th, 1919, between
the Reich, the Oberschlesische and the Treuhand, or with the offer of sale of the shares of the Oberschlesische to the Geneva
Compagnie d'azote et de fertilisants made on May 26th, 1922. It has already been pointed out above that the value of the undertaking
at the moment of dispossession does not necessarily indicate the criterion for the fixing of compensation. Now it is certain that the
moment of the contract of sale and that of the negotiations with the Genevese Company belong to a period of serious economic and
monetary crisis; the difference between the value which the undertaking then had and that which it would have had at present may
therefore be very considerable. And further, it must be considered that the price stipulated in the contract of 1919 was determined by
circumstances and accompanied by clauses which in reality seem hardly to admit of its being considered as a true indication of the
value which the Parties placed on the factory; and that the offer to the Genevese Company is probably to be explained by the fear of
measures such as those which the Polish Government in fact adopted afterwards against the Chorzów undertaking, and which the
Court has judged not to be in conformity with the Geneva Convention. [p51]

[135] And finally as regards the sum agreed on at one moment by the two Governments during the negotiations which followed
Judgment No. 7 - which sum, moreover, neither Party thought fit to rely on during the present proceedings it may again be pointed out
that the Court cannot take into account declarations, admissions or proposals which the Parties may have made during direct
negotiations between themselves, when such negotiations have not led to a complete agreement.

[136] This being the case, and in order to obtain further enlightenment in the matter, the Court, before giving any decision as to the
compensation to be paid by the Polish Government to the German Government, will arrange for the holding of an expert enquiry, in
conformity with Article 50 of its Statute and actually with the suggestions of the Applicant. This expert enquiry, directions for which are
given in an Order of Court of to-day's date, will refer to the following questions:

I. A. What was the value, on July 3rd, 1922, expressed in Reichsmarks current at the present time, of the undertaking for the
manufacture of nitrate products of which the factory was situated at Chorzów in Polish Upper Silesia, in the state in which that
undertaking (including the lands, buildings, equipment, stocks and processes at its disposal, supply and delivery contracts, goodwill
and future prospects) was, on the date indicated, in the hands of the Bayerische and Oberschlesische Stickstoffwerke?
B. What would have been the financial results, expressed in Reichsmarks current at the present time (profits or losses), which would
probably have been given by the undertaking thus constituted from July 3rd, 1922., to the date of the present judgment, if it had been in
the hands of the said Companies?

II. What would be the value at the date of the present judgment, expressed in Reichsmarks current at the present time, of the same
undertaking (Chorzów) if that undertaking (Including lands, buildings, equipment, stocks, available processes, supply and delivery
contracts, goodwill and future prospects) had remained in the hands of the Bayerische and Oberschlesische Stickstoffwerke, and had
either remained substantially as it was in 1922 or had been developed proportionately on [p52] lines similar to those applied in the case
of other undertakings of the same kind, controlled by the Bayerische, for instance, the undertaking of which the factory is situated at
Piesteritz?

[137] The purpose of question 1 is to determine the monetary value, both of the object which should have been restored in kind and of
the additional damage, on the basis of the estimated value of the undertaking including stocks at the moment of taking possession by
the Polish Government, together with any probable profit that would have accrued to the undertaking between the date of taking
possession and that of the expert opinion.

[138] On the other hand, question II is directed to the ascertainment of the present value on the basis of the situation at the moment of
the expert enquiry and leaving aside the situation presumed to exist in 1922.

[139] This question contemplates the present value of the undertaking from two points of view: firstly, it is supposed that the factory had
remained essentially in the state in which it was on July 3rd, 1922, and secondly, the factory is to be considered in the state in which it
would (hypothetically but probably) have been in-the hands of the Oberschlesische and Bayerische, if, instead of being taken in 1922
by Poland, it had been able to continue its supposedly normal development from that time onwards. The hypothetical nature of this
question is considerably diminished by the possibility of comparison with other undertakings of the same nature directed by the
Bayerische, and, in particular, with the Piesteritz factory, the analogy of which with Chorzów, as well as certain differences between the
two, have been many times pointed out during the present proceedings.

[140] In regard to this, it should be observed that the Agent for the German Government, at the public sitting of June 21st, 1928,
handed in two certificates by notaries containing a summary of contracts concluded on April 16th, 1925, and August 27th, 1927,
between the Mitteldeutsche Stickstoffwerke A.-G. and the Bayerische, and adhered to by the Vereinigte Industrie-Unternehmungen A.-
G., under which contracts the Mitteldeutsche leased to the Bayerische the landed properties at Piesteritz belonging to it, together with
all installations, etc., connected therewith. The Agent for the Polish Government [p53], however, in his speech on June 25th, said that,
not being acquainted with the contracts and being entirely unable to form an opinion as to whether the summaries in question
contained all the data necessary for accurate calculations, he formally objected to the said summaries being taken as a basis in the
present proceedings.

[141] As regards the lucrum cessans, in relation to question II, it may be remarked that the cost of upkeep of the corporeal objects
forming part of the undertaking and even the cost of improvement and normal development of the installation and of the industrial
property incorporated therein, are bound to absorb in a large measure the profits, real or supposed, of the undertaking. Up to a certain
point, therefore, any profit may be left out of account, for it will be included in the real or supposed value of the undertaking at the
present moment. If, however, the reply given by the experts to question I B should show that after making good the deficits for the
years during which the factory was working at a loss, and after due provision for the cost of upkeep and normal improvement during the
following years, there remains a margin of profit, the amount of such profit should be added to the compensation to be awarded.

[142] On the other hand, if the normal development presupposed by question II represented an enlargement of the undertaking and an
investment of fresh capital, the amount of such sums must be deducted from the value sought for.

[143] The Court does not fail to appreciate the difficulties presented by these two questions, difficulties which are however inherent in
the special case under consideration, and closely connected with the time that elapsed between the dispossession and the demand for
compensation, and with the transformations of the factory and the progress made in the industry with which the factory is concerned. In
view of these difficulties, the Court considers it preferable to endeavour to ascertain the value to be estimated by several methods, in
order to permit of a comparison and if necessary of completing the results of the one by those of the others. The Court, therefore,
reserves every right to review the valuations referred to in the different formulæ; basing itself on the results of the said valuations and
of facts and documents submitted to it, it will then [p54] proceed to determine the sum to be awarded to the German Government, in
conformity with the legal principles set out above.

[144] It must be stated that the Chorzów factory to be valued by the experts includes also the chemical factory.

[145] Besides the arguments which, in the Polish Government's opinion, tend to show that the working of the said factory was not
established on a profitable basis-arguments which it will be for the experts to consider-that Government has claimed that the working
depended on a special authorization, which the Polish authorities were entitled to refuse. But the Court is of opinion that this argument
is not well-founded.

[146] The authorization referred to seems to be that envisaged by paragraph 18 of the Prussian law of 1861, under which, failing
international treaty provisions to the contrary, moral persons of foreign nationality cannot engage in industry without the authorization of
the Government. In the present case, it is certain that the Geneva Convention does actually constitute the international treaty which,
guaranteeing to industrial undertakings the continuation of their activities, does away with any necessity for the special authorization
required by the law of 1861.

[147] The fact that the chemical factory was not only not working, but not even completed, at the time of transfer of the territory to
Poland, can be of no importance; for chemical industry of all kinds was expressly mentioned in the articles of the Oberschlesische
Company as one of the objects of that Company's activities, and the sections and plant of the chemical factory, which were, moreover,
closely connected with the sections and plant producing nitrate of lime, had already been provided for and mentioned in the contract for
construction and exploitation of March 5th, 1915 ; thus, the entry into working of the factory was only the normal and duly foreseen
development of the industrial activity which the Oberschlesische had the right to exercise in Polish Upper Silesia. [p55]

***

[148] In the Court's Opinion, the value to which the above questions relate will be sufficient to permit it with a full knowledge of the facts
to fix the amount of compensation to which the German Government is entitled, on the basis of the damage suffered by the two
Companies in connection with the Chorzów undertaking.

[149] It is true that the German Government has pointed out several times during the written and oral proceedings that fair
compensation for damage suffered by the Bayerische could not be limited to the value of what has been called the "contractual rights",
namely, the remuneration provided for in the contracts between the Reich or the Oberschlesische and the said Company for having
made available its patents, licences and experience gained, for the management and for the organization of the sale of the finished
products. The reason given is that this remuneration, which was accepted in view of the special relationship -between the Parties,
would hardly correspond to the fair remuneration which the Bayerische might have claimed from any third party, like the Polish
Government, for the same consideration. It was on these grounds that the German Government proposed to take as a basis for the
calculation of damage suffered by the Bayerische a licence supposed to be granted by the said Company to a third party under fair and
normal conditions.

[150] The method adopted by the Court in putting the questions set out above to the experts meets the German Government's
contention, in so far as that contention is justified. For if the Bayerische had demanded a larger sum or additional payments in its
favour, or if it had stipulated for other conditions to its advantage, the value to the Oberschlesische of its participation would to the.
same extent be diminished; this shows that the relation between value given and value received does not enter into consideration in
calculating the worth of the enterprise as a, whole. If the Bayerische had not merely managed but also owned the undertaking, this
amount would still be the same ; in fact, all the elements constituting the [p56] undertaking-the factory and its accessories on the one
hand, the non-corporeal and other values supplied by the Bayerische on the other-are independent of the advantages which, under its
contracts, each of the two Companies may derive from the undertaking.

[151] For this reason, any difference which might exist between the conditions fixed in the contracts of 1913, 1919 and 1920 and those
laid down in a contract supposed to be concluded with a third party, is of no importance in estimating the damage.

***

[152] It therefore only remains to be considered whether, in conformity with the reservation. made above, the Bayerische has, owing to
the dispossession, suffered damage, other than that sustained by the undertaking, such as might be considered in calculating the
compensation demanded by the German Government.

[153] Although the position taken up on this subject by the German Government does not seem clear to it, the Court is, in a position to
state that this Government has not failed to draw attention to certain circumstances which are said to prove the existence of damage of
such a nature. The possibility of competition injurious to the Bayerische's factories by a third party, alleged to have unlawfully become
acquainted with and have obtained means of making use of that Company's processes, is certainly the circumstance which is most
important and easiest to appreciate in this connection.

[154] The Court must however observe that it has not before it the data necessary to enable it to decide as to the existence and extent
of damage resulting from alleged competition of the Chorzów factory with the Bayerische factories ; the Court is not even in a position
to say for certain whether the methods of the Bayerische have been or are still being employed at Chorzów, nor whether the products
of that factory are to be found in the markets in which the Bayerische sells or might sell products from its own factories. In these
circumstances, the Court can only observe that the damage alleged to have resulted from competition is insufficiently proved. [p57]

[155] Moreover, it would come under the heading of possible but contingent and indeterminate damage which, in accordance with the
jurisprudence of arbitral tribunals, cannot be taken into account.

[156] This is more especially the case as regards damage which might arise from the fact that the field in which the Bayerische can
carry out its experiments, perfect its processes and make fresh discoveries has been limited, and from the fact that the Company can
no longer influence the market in the manner that it have done if it had continued to work the Chorzów factory.

[157] As the Court has discarded for want of evidence, indemnity for damage alleged to have been sustained by the Bayerische
outside the undertaking, it is not necessary to consider whether the interests in question would be protected by Articles 6 to 22 of the
Geneva Convention.

***

[158] In addition to pecuniary damages for the benefit of the Bayerische, the German Government asks the Court to give judgment :

"that, until June 30th, 1931, no nitrated lime and no nitrate of ammonia should be exported to Germany, to the United States of
America, to France or to Italy;
in the alternative, that the Polish Government should be obliged to cease working the factory or the chemical equipment for the
production of nitrate of ammonia, etc."

[159] In regard to these submissions, it should be observed in the first place that they cannot contemplate damage already sustained,
but solely damage which the Bayerische might suffer in the future.

[160] If the prohibition of export is designed to prevent damage arising from the competition. which the Chorzów factory might offer to
the Bayerische factories, this claim must be at once dismissed, in view of the result arrived at above by the Court. To the reasons on
which this result was based, it is to be added, in so far as the prohibition of export is concerned, that the Applicant has furnished no
information [p58] enabling the Court to satisfy itself as to the justification for the German submission naming certain countries to which
export should not be. allowed and stating a definite period for which this prohibition should be in force.

[161] It must further be observed that if the object of the prohibition were to protect the industrial property rights of the Bayerische and
to prevent damage which the latter might suffer as a result of the use of these rights by Poland, in conflict with licences granted by the
Bayerische to other persons or companies, the German Government should have furnished definite data as regards the existence and
duration of the patents or licences in question. But notwithstanding the express requests made in this respect by the Polish
Government, the German Government has produced no such data. The explanation no doubt is that the German Government does not
appear to wish to base its claim respecting a prohibition of export upon the existence of these patents and licences.

[162] On the contrary, the German Government's claim seems to present the [p59] prohibition of export as a clause which should have
been included in a fair and equitable licensing contract concluded between the Bayerische and any third party; in this connection the
following remarks should be made:

[163] The mere fact that the produce of any particular undertaking is excluded from any particular market cannot evidently in itself be in
the interests of such undertaking, nor of the persons who, as such, are interested therein. If the Bayerische -which, whilst participating
with the Oberschlesische in the Chorzów undertaking, constitutes an entirely separate undertaking from that of Chorzów and one that
may even to a certain extent have interests conflicting with those of Chorzów -were to Emit in its own favour, by contract, the number of
the markets of that factory, it would follow that the profit which it would draw from its share in the Chorzów undertaking might be
correspondingly diminished. The Court having, as is said above, adopted, in calculating the compensation to be awarded to the
German Government, a method by which such compensation shall include the total value of the undertaking, it follows that the profits
of the Bayerische will be estimated without deducting the advantages which that Company might draw from a clause limiting export.
The prohibition of export asked for by the German Government cannot therefore be granted, or the same compensation would .be
awarded twice over.

[164] This being so, the Court need not deal with the question whether such a prohibition, although customary in contracts between
individuals, might form the subject of an injunction issued by the Court to a government, even if that government were working, as a
State enterprise, the factory of which export was to be limited, nor if the prohibition asked for would be fair and appropriate in the
circumstances.

[165] As regards the German Government's alternative claim for a prohibition of exploitation, it may be added that this seems hardly
compatible with the award of compensation representing the present value of the undertaking; for when that compensation, which is to
cover future prospects and will consist in a sum of money bearing interest, has been paid, the Polish Government will have acquired
the right to continue working the undertaking as valued, more especially as the Parties agree that the factory shall remain in the hands
of the Polish Government. This agreement cannot, in fact, be construed as meaning that the factory should remain inoperative or be
adapted to some other purpose, if the reparation contemplated did not include, in addition to a pecuniary indemnity, the prohibition of
export sought for. It is moreover very doubtful whether, apart from any other consideration, prohibition of exploitation is admissible
under the Geneva Convention, the object of which is to provide for the maintenance of industrial undertakings, and which, for this
purpose, even permits them, in exceptional cases, to be expropriated (Article 7)

IV.

[166] The Court thinks it preferable not to proceed at this stage to consider the Parties' submissions concerning certain conditions and
methods in regard to the payment of the indemnity to be awarded, which conditions and methods are closely connected either with the
amount of the sum to be paid or with circumstances which may exist when the time comes for payment. This applies more especially
as regards the [p60] German submission No. 4 (a)-(b)-(c), and the Polish submissions A 3 and B 1 (c), which the Court therefore
reserves for the judgment fixing the indemnity.

[167] On the other hand, it is possible and convenient at once to decide the so-called question of set-off to which submission No. 4 (d)
of the Applicant and submission C of the Respondent respectively relate.

[168] The claim of the German Government in regard to this matter has, in the last instance, been couched in the following terms:

[Translation.]
"It is submitted that the Polish Government is not entitled to set off, against the above-mentioned claim for indemnity of the German
Government, its claim in respect of social insurances in Upper Silesia; that it may not make use of any other set-off against the above-
mentioned claim for indemnity; in the alternative, that set-off is only permissible if the Polish Government puts forward for this purpose
a claim in respect of a debt recognized by the German Government or established by a judgment given between the two
Governments.”

[169] The Polish Government, for its part, has simply asked for the rejection of this submission.

[170] If the German submission is read literally, it is possible to regard it as mainly designed to prevent a specific case of setoff, that is
to say, the setting-off in this case of the claim which the Polish Government contends that it possesses in respect of social insurances
in Upper Silesia, and which was the cause of the failure of the negotiations between the two Governments following Judgment No. 7.
But, if we consider the submission in the light of the observations contained in the Case and more especially in the Reply, it is easy to
see that the claim in respect of social insurances in Upper Silesia is only taken as an example. In reality, the German Government asks
the Court for a decision of principle the effect of which would be either to prevent the set-off of any counterclaim against the indemnity
fixed in the judgment to be given by the Court, or, alternatively, only to allow such set-off in certain defined circumstances.

[171] Though, as has been seen, the Polish Government for its part confines itself in its submission to asking the Court to reject the
German submission, the arguments advanced in [p61] support of its claim clearly show that it considers the said German submission to
be both premature and inadmissible, and that the Court has therefore no power to deal with it.

[172] The question of the Court's jurisdiction is thus clearly raised. Since there is no agreement between the Parties to submit to the
Court the so-called question of set-off, it remains first of all to be considered whether the Court has jurisdiction to pass judgment on the
German submission No. 4 (d) in virtue of any other provision, which, in the present case, could only be Article 23 of the Geneva
Convention.

[173] It is clear that the question whether international law allows claims to be set-off against each other, and if so, under what
conditions such set-off is permitted, is, in itself, outside the jurisdiction derived by the Court from the said article. But the German
Government contends that the question raised by it only relates to one aspect of the payment which the Polish Government must make
and that, this being so, it constitutes a difference of opinion covered by the arbitration clause contained in the article.

[174] The Court considers that this argument must be interpreted in the sense that the prohibition of set-off is asked for in order to
ensure that in the present case reparation shall be really effective.

[175] It may be admitted, as the Court has said in Judgment No. 8, that jurisdiction as to the reparation due for the violation of an
international convention involves jurisdiction as to the forms and methods of reparation. If the reparation consists in the payment of a
sum of money, the Court may therefore determine the method of such payment. For this reason it may well determine to whom the
payment shall be made, in what place and at what moment; in a lump sum or maybe by instalments; where payment shall be made;
who shall bear the costs, etc. It is then a question of applying to a particular case the general rules regarding payment, and the Court's
jurisdiction arises quite naturally out of its jurisdiction to award monetary compensation.

[176] But this principle would be quite unjustifiably extended if it were taken as meaning that the Court might have cognizance of any
question whatever of international law [p62] even quite foreign to the convention under consideration, for the sole reason that the
manner in which such question is decided may have an influence on the effectiveness of the reparation asked for. Such an argument
seems hardly reconcilable with the fundamental principles of the Court's jurisdiction, which is limited to cases specially provided for in
treaties and conventions in force.

[177] The German Government's standpoint however is that the power of the Court to decide on the exclusion of set-off is derived from
the power which it has to provide that reparation shall be effective. Now, it seems clear that this argument can only refer to a plea of
set-off raised against the beneficiary by the debtor, of such a nature as to deprive reparation of its effectiveness. Such for instance
would be the case if the claim put forward against the claim on the score of reparation was in dispute and was to lead to proceedings
which would in any case have resulted in delaying the entry into possession by the person concerned of the compensation awarded to
him. On the contrary, if a liquid and undisputed claim is put forward against the reparation claim, it is not easy to see why a plea of set-
off based on this demand should necessarily prejudice the effectiveness of the reparation. It follows that the Court's Jurisdiction under
Article 23 of the Geneva Convention could in any case only be relied on in regard to a plea raised by the respondent Party.

[178] Now it is admitted that Poland has raised no plea of set-off in regard to any particular claim asserted by her against the German
Government.

[179] It is true that in the negotiations which followed Judgment No. 7 Poland had put forward a claim to set off a part of the indemnity
which she would have undertaken to pay the German Government, against the claim which she put forward in regard to social
insurances in Upper Silesia. But the Court has already had occasion to state that it can take no account of declarations, admissions or
proposals which the Parties may have made during direct negotiations between them. Moreover, there is nothing to justify the Court- in
thinking that the Polish Government would wish to put forward, against a judgment of the Court, claims which it may have thought [p63]
fit to raise during friendly negotiations which the Parties intended should lead to a compromise. The Court must also draw attention in
this connection to what it has already said in Judgment No. 1 to the effect that it neither can nor should contemplate 'the contingency of
the judgment not being complied with at the expiration of the time fixed for compliance.

[180] In these circumstances the Court must abstain from passing upon the submissions in question.

***

[181] For these reasons,

The Court,
having heard both Parties,
by nine votes to three,
(1) gives judgment to the effect that, by reason of the attitude adopted by the Polish Government in respect of the Oberschlesische
Stickstoffwerke and Bayerische Stickstoffwerke Companies, which attitude has been declared by the Court not to have been in
conformity with the provisions of Article 6 and the following articles of the Geneva Convention, the Polish Government is under an
obligation to pay, as reparation to the German Government, a compensation corresponding to the damage sustained by the said
Companies as a result of the aforesaid attitude;
(2) dismisses the pleas of the Polish Government with a view to the exclusion from the compensation to be paid of an amount
corresponding to all or a part of the damage sustained by the Oberschlesische Stickstoffwerke, which pleas are based either on the
judgment given by the Tribunal of Katowice on November 12th, 1927, or on Article 256 of the Treaty of Versailles;
(3) dismisses the submission formulated by the Polish Government to the effect that the German Government should in the first place
hand over to the Polish Government the whole of the shares of the Oberschlesische Stickstoffwerke Company, of the nominal value of
110,000,000 [p64] marks, which are in the hands of the German Government under the contract of December 24th, 1919;
(4) dismisses the alternative submission formulated by the Polish Government to the effect that the claim for indemnity, in so far as the
Oberschlesische Stickstoffwerke Company is concerned, should be provisionally suspended;
(5) dismisses the submission of the German Government asking for judgment to the effect that, until June 30th, 1931, no nitrated lime
and no nitrate of ammonia should be exported to Germany, to the United States of America, to France or to Italy, or, in the alternative,
that the Polish Government should be obliged to cease working the factory or the chemical equipment for the production of nitrate of
ammonia, etc.
(6) gives judgment to the effect that no decision is called for on the submissions of the German Government asking for judgment to the
effect that the Polish Government is not entitled to set off, against the above-mentioned claim for indemnity of the German
Government, its claim in respect of social insurances in Upper Silesia; that it may not make use of any other set-off against the said
claim for indemnity, and, in the alternative, that set-off is only permissible if the Polish Government puts forward for this purpose a claim
in respect of a debt recognized by the German Government or established by a judgment given between the two Governments;
(7) gives judgment to the effect that the compensation to be paid by the Polish Government to the German Government shall be fixed
as a lump sum;
(8) reserves the fixing of the amount of this compensation for a future judgment, to be given after receiving the report of experts to be
appointed by the Court for the purpose of enlightening it on the questions set out in the present judgment and after hearing the Parties
on the subject of this report;
(9) also reserves for this future judgment the conditions and methods for the payment of the compensation in so far as concerns points
not decided by the present judgment. [p65]

[182] Done in French and English, the French text being authoritative, at the Peace Palace, The Hague, this thirteenth day of
September nineteen hundred and twenty-eight, in three copies, one of which is to be placed in the archives of the Court, and the others
to be forwarded to the Agents of the applicant and respondent Parties respectively.

(Signed) D. Anzilotti
President.
(Signed) Paul Ruegger
Deputy-Registrar.

[183] M. de Bustamante, Judge, declares that he is unable to concur in the judgment of the Court as regards No. 8 of the operative
portion; he considers that the questions numbered I B and II in the judgment should not be put to the experts.

[184] M. Altamira, Judge, declares that he is unable to concur in the judgment of the Court as regards No. 6 of the operative portion.

[185] M. Rabel, National Judge, desires to add to the judgment the remarks which follow hereafter.

[186] Lord Finlay, Judge, and M. Ehrlich, National judge, declaring that they cannot concur in the judgment of the Court and availing
themselves of the right conferred on them by Article 57 of the Statute, have delivered the separate opinions which follow hereafter.

[187] M. Nyholm, Judge, being unable to concur in the result arrived at by the judgment, desires to add the remarks which follow
hereafter.

(Initialled) D. A.
(Initialled) P. R.

[p66] Observations by M. Rabel.

[188] Whilst in general agreement with the judgment delivered by the Court, I find myself, to my regret, compelled to disagree with it in
regard to some points, one of which I feel it my duty to deal with below (No. II). Before doing so, I wish briefly to explain my point of
view in accepting the solution adopted by the Court in regard to the main question concerning the fixing of the indemnity due by the
Respondent (No. I).

[189] I. In Chapter III, the judgment begins by saying that if the expropriation effected by the Polish Government had been lawful, the
compensation due by it therefore should correspond to the value of the undertaking at the time of dispossession, plus interest on this
sum to the, date of payment. The judgment goes on to say that this limitation of the compensation is not admissible in the present case
because the Polish Government had no right of expropriation and that, consequently, the German Government is entitled to be
compensated for all the losses suffered by its nationals as a result of the seizure of the undertaking.

[190] Being convinced of the justice of these arguments, I have accepted them, believing that the principles resulting from the unlawful
nature of the expropriation, which principles are subsequently set out in the judgment, are applicable in practice whenever the damage
caused appears greater than the compensation which would be due if expropriation had been lawful, as may be the case in the present
suit.

[191] It is in fact obvious that the expropriator's responsibility must be increased by the fact that his action is unlawful. Nevertheless, it
is in my opinion also obvious that the unlawful character of his action can never place the expropriator in a more favourable position,
nor the expropriated Party in a more unfavourable position, either by reducing the indemnity due or by increasing the burden of proof
resting upon the Applicant. This point of view, with which the Court in its judgment has not thought fit expressly to deal, appears to me
to be in accordance with the general principles of law. [p67]

[192] It corresponds to the notion which has been very clearly, established, for instance in the application of German civil law, namely
that the fact that an act is of an unlawful character - in the same way as if it were of a deceptive or defective character - though in
principle aggravating the consequences of the act, nevertheless leaves intact, in favour of the injured Party, and to be asserted by him
should he choose to do so, the rights to which the act would have given rise if it had been lawful or less culpable.

[193] It appears to me therefore that the obligation resulting from an unlawful seizure may be simply expressed as follows: A
government which has expropriated an object - with no right to do so - is obliged to pay the value of the object at the moment of
dispossession plus interest on this value, and it is also responsible for damage caused in so far as such damage exceeds the amount
mentioned above.

[194] The questions put by the Court to the experts meet this view, though, in my opinion, they are not in all points necessary or
expedient.
[195] II. I cannot concur in the Court's decision in regard to the so-called question of set-off.

[196] 1. This question first arose in a note of the Polish Government of February 1st, 1927, to the effect that that Government had
claims against Germany in respect of various amounts, one of which, arising out of social insurances in Upper Silesia, had been fixed
by an award of the League of Nations at 25 million Reichsmarks. In these circumstances, it contended that the respective claims
should be set off against each other. It is to be observed that this statement related to the note and aide-memoire of the German
Government, dated January 19th, 1927, which "in regard to the question of the method, of payment, which tended more and more to
become the main question", demanded "in principle a full and immediate payment" and proposed, as regards some portions of the
payment, the delivery of bills of exchange.

[197] As will be seen, the Polish Government, in asserting its right to set-off, did not specify the claims in question, except the claim
arising out of social insurance in Upper Silesia. Now the Arbitral Tribunal of Interpretation, established between [p68] the Reparation
Commission and Germany to hear disputes concerning the so-called Dawes Plan, gave, on March 24th, 1926, a decision having the
force of res judicata as between Germany and Poland, to the effect that the payment of the 25 millions referred to is included in the
annuities which, under the Dawes Plan, Germany has to pay to the Agent-General for Reparation Payments. As these annuities
consist of fixed sums, the Polish Government's contention was therefore designed to make the German Government - contrarily to the
award of the Arbitral Tribunal of Interpretation - bear the burden of this claim, by causing it to lose the indemnity due for the
dispossession of the Oberschlesische, which had been established by another international judgment, namely the Court's Judgment
No. 7.

[198] 2. In the course of the proceedings leading up to Judgment No. 8, as well as those leading up to the present judgment, in spite of
the invitations of the Applicant on the subject and notwithstanding the exhaustive statements made by both Parties on the question of
set-off, the Polish Government has neither put forward specific claims to which it is entitled, nor said that it would not maintain its
submission that judicial or extra-¬judicial set-off against the future judgment should be allowed.

[199] The German Government in the course of the proceedings has several times pressed that the Court should decide this question
which, being the real cause of the breakdown of the diplomatic negotiations, is, in its opinion, a question of vital importance in this suit,
and that, unless it were decided, the dispute concerning the Chorzów factory would not really be completely adjusted.

[200] 3. The Court considers that it has not jurisdiction to pass upon this difference of opinion under Article 23 of the Geneva
Convention.

[201] It should be observed that the terms of the judgment which dismisses the German claim in regard to the question of set-off in so
far as they are based on the said opinion, do not seem to me to have any bearing on claims directly seeking judgment for an actual
payment in money. For the Court, having decided in its judgment that the said Article 23 of the Geneva Convention gives it jurisdiction
to determine the form and [p69] method of the reparation due, seems undoubtedly to cover, in this definition of its jurisdiction the
question whether, in this case, a money indemnity should be actually paid in money or in other values.

[202] 4. The judgment deals rather with the abstract question raised by the Applicant as to whether and under what conditions a
respondent condemned by a judgment of the Court to pay a certain slim, may put forward a counter-claim to be set off against this
obligation. This question also seems to me to enter into the present proceedings and not to relate to a point necessarily distinct from
them, such as should only be taken at a subsequent stage.

[203] A judgment imposing a penalty creates an obligation and lays down in what that obligation consists. In a system of municipal law,
the judge may and should confine himself to certain observations and technical points, which observations may be read in the light of
relevant municipal legislation. Thus municipal law will define what is meant by a payment which the defendant is ordered to make and
in particular whether and under what conditions the setting-off of a counterclaim is equivalent to payment in money of the judgment
debt. If, on the other hand, in an international case, the Parties are at issue as to the action to be taken by the defendant in complying
with the judgment, it appears to me that the nature of this action must be defined in the judgment in order to avoid any possible
uncertainty.

[204] As regards the other conditions necessary for the granting of the claim in question, I will merely point out that in my opinion they
also are fulfilled in the present case.

(Signed) E. Rabel.

[p70] Dissenting Opinion by Lord Finlay

[205] I regret that I am unable to concur in the judgment that has just been delivered. I think that question II ought not to have been put
to the experts and am further unable to agree with what is said in the judgment as to the principles governing the assessment of the
indemnity.

I.

[206] In its Memoire, Chapter II, § 2 at page 13, the German Government renounced its claim to restitution of the undertaking in the
following terms:

"Le Gouvernement allemand, qui, au commencement, avait demande la restitution en nature de l'entreprise expropriée, s'est
convaincu, au cours des négociations, que la restitution n'entre pas en cause, étant donne que l'usine, qui a été exploitée par I'Etat
polonais pendant presque cinq années et qui a été soustraite aux soins et au développement de l'entrepreneur primitif pour être
adaptée aux besoins de son exploiteur actuel, n'est plus, dans son 6tat actuel, au point de vue juridique et économique, le même objet
qu'elle était à la date de la reprise, et que, par conséquent, elle n'est pas propre à être restituée."

[207] The Party who has been dispossessed has a choice of remedies. He may claim restitution of the property taken. This is what is
meant by restitutio in integrum. He may on the other hand abandon any claim to restitution of the actual property and claim damages
instead. The German Government abandoned its claim to restitution, possibly under the impression - which may have been correct -
that the alterations were not of a nature which would harmonize with the use to which the German Government intended that the
property should be put. If the German Government had obtained restitutio in integrum, it would have got the property itself and any
enhanced value which it, had reached would necessarily go to the German Government with the property. But since the claim to
restitution is abandoned, the only claim is for damages for the wrongful act. A Party who has given up [p71] his right to restitutio in
integrum is not entitled to claim damages on the footing that it is right that he should have the enhanced value, if any: that he would
have got if he had pressed his claim for restitution. The German Government having renounced restitution cannot make good a claim
to recover an amount representing the value of the property which would have to be restored. It has given up restitution and elected to
take damages and these damages must be assessed according to the general rule as at the time of the wrong.

[208] There is no trace of anything from which it could be implied that on giving up the right to restitutio in integrum, Germany should be
entitled in lieu thereof to get damages on a higher scale than that on which the damages for a wrongful taking would by law be
assessed. If the Parties had intended this they would have said so. Germany and Poland merely agreed that the claim for restitution
had been abandoned, and that left matters exactly as if that claim had never been put forward. To construe this transaction as involving
an agreement that the damages should be assessed in any but the usual way is to make a new agreement for the Parties. What the
Parties did was merely to abandon restitution with the consequence that Germany took the right to damages to be assessed in the
usual way.

[209] In my opinion, according to the general principle of international law, these damages should be assessed upon the basis of the
value of the undertaking at the time of the seizure, that is the 3rd July, 1922, together with a fair rate of interest on that value from that
date until the date of payment; and in addition any other damage directly consequent upon the seizure.

[210] It may be that damages so assessed will amount to no more than the amount which the Polish Government would have had to
pay if it had been able to expropriate the undertaking in conformity with the terms of the Geneva Convention; but this is immaterial.
Germany has selected as the form of reparation for the wrong done to her at international [p72] law a pecuniary indemnity
corresponding to the loss sustained by her nationals. It is immaterial whether the result of this selection is to put Germany and the
German Companies in a better or worse position than that in which they would otherwise have been.

[211] It is said that the general rule as to assessment of damages cannot here be applied and that some distinction must be made
between the consequences of a wrongful expropriation and those of a lawful expropriation in accordance with the provisions of the
Geneva Convention. The fact that Poland, had she expropriated in accordance with the Geneva Convention, would have been bound
to pay an indemnity equal to the amount of the damages, if the damages are assessed according to the general rule of international
law, does not affect the matter. The question is what was the loss inflicted on the two Companies by the seizure.

[212] It is argued that it would not be equitable that the liability of a mere wrongdoer should be no greater than that of one who had
expropriated the property in accordance with the terms of the Geneva Convention.

[213] Expropriation in accordance with those terms was at the time impossible, in the absence of recognition by the Mixed Commission
that this measure was indispensable for the maintenance of the working of the undertaking (Article 7). No special provision is made in
the Convention as to what is to happen if the Government takes property in contravention of these provisions: that is left to the general
law. It is now however argued that it is not equitable that the general law should apply in such a case, and an effort is made to modify it
so as to prevent the Government which has so acted being financially in no worse position than one which has acted under the
provisions of the Geneva Convention.

[214] It seems to me that it is entirely beyond the province of the Court in effect to introduce provisions of this nature, in the absence of
agreement in treaty or convention to that effect. [p73]

II.

[215] If the relevant time for determining the value of the undertaking is the time of the seizure, it follows that the value of the
undertaking at the present time, had it remained in the hands of the Oberschlesische and the Bayerische, is irrelevant except in so far
as it may give some assistance in determining the value at the time of the seizure. It is not necessary to refer to the experts any
question directed to the value at the present time. I think therefore that question II is unnecessary.

[216] That question is in the following terms:

«Quelle serait la valeur exprimée en Reichsmarks actuels, à la date du présent arrêt, de ladite entreprise de Chorzów, si cette
entreprise (y compris les terrains, bâti¬ments, outillage, stocks, procèdes disponibles, contrats de fourniture et de livraison, clientèle et
chances d'avenir), étant restée entre les mains des Bayerische et Oberschle¬sische St. W., soit était demeurée essentiellement en
l'état de 1922, soit avait reçus, toutes proportions gardées, un développement analogue à celui d'autres entreprises du même genre,
dirigées par la Bayerische, par exemple, l'entreprise dont l'usine est sise à Piesteritz?»
[Translation.]
"What would be the value at the date of the present judgment, expressed in Reichsmarks current at the present time, of the same
undertaking (Chorzów) if that undertaking (including lands, buildings, equipment, stocks, available processes, supply and delivery
contracts, goodwill and future prospects) had remained in the hands of the Bayerische and Oberschlesische Stickstoffwerke, and had
either remained substantially as it was in 1922, or been developed proportionately on lines similar to those applied in the case of other
undertakings of the same kind, controlled by the Bayerische, for instance, the undertaking of which the factory is situated at Piesteritz?”

[217] Further, I consider this question unsatisfactory in itself. It is directed to two values under hypothetical conditions. The first of those
values is dependent upon the hypothesis that the undertaking remained substantially in the condition in which it was in 1922. It would
be difficult to say what the present day value of the undertaking in such an obsolete [p74] condition would be. The second of those
values is dependent upon a hypothetical development of the undertaking. The development which the question assumes is one
"proportionately on lines similar to" the development which has taken place in what are alleged to be parallel undertakings. It would be
difficult to determine the proportions of development applicable. The question of what undertakings may be taken into consideration for
this purpose seems to be one for the experts themselves, and I think that question II would present great difficulty in the working.

[218] It is on these two points only that I am unable to concur in the judgment of the Court in this case; but they are of vital importance.

(Signed) Finlay.

[p75] Dissenting Opinion by M. Ehrlich.

[219] I regret that I disagree on some of the questions decided by the judgment which has just been given.

I.

[220] In my opinion, the Court should have taken into consideration the judgment given by the Civil Court of Katowice.

[221] The Parties are agreed, and moreover it follows from the principles generally applied by arbitral tribunals, that in cases like the
present the basis of the award must be found, not in the enrichment of the Respondent, but in the loss suffered by the individuals
concerned. In this case these are the Bayerische and Oberschlesische, and the Respondent has contended, among other things, that
the Oberschlesische was not the owner of the lands and buildings which were entered in its name in the land register, from January,
1920, until this ,entry was vacated, in 1922, in accordance with the Polish law of 1920.

[222] In my opinion this contention of the Respondent cannot be rejected on the basis of what the Court has said either in Judgment
No. 7 or in Judgment No. 8.

[223] The judgment which has just been given does not, it is true, rely on res judicata; this is correct, for it is quite certain, to mention
only the case of the Pious Fund of the Californias, that in international law, one of the conditions on which the existence of res judicata
is dependent is that there must be "identity of subject matter" and that the point which was decided must relate to the "merits of the
case". It is evident that in the proceedings concluded by Judgment [p76] No. 7, the question of the ownership of the Oberschlesische
was not a part of the main dispute, but that it was a question to be decided as a preliminary and incidental point. This is precisely what
the Court said in Judgment No. 7:

"In the next place, it must be observed that the Court, in the exercise of the jurisdiction granted by Article 23 of the Geneva Convention,
will not examine, save as an incidental or preliminary point, the possible existence of rights under German municipal law."

[224] German legislation was referred to because, in Polish Upper Silesia, it is German civil law which determines such questions of
real property.

[225] The Court maintained the same standpoint in Judgment No.11, when it recalled that, in Judgment No. 7, it had recognized the
necessity of examining, though "as an incidental or preliminary point", the contention of the Polish Government that the contract of
1919 and the transfer of the factory to the Oberschlesische were of a fictitious and fraudulent character.

[226] It is generally admitted that the principles of litispendency and res judicata do not apply to questions decided as incidental and
preliminary points.

[227] Without however laying down that there is res judicata, the judgment which has just been delivered declares that it would be
impossible for the Oberschlesische's right to the Chorzów factory to be defined differently for the purposes of Judgment No. 7 and in
relation to the claim for reparation which is the subject matter of the present judgment.

[228] On this point I disagree. It is true that facts adduced by one Party and accepted by the Court as the direct or indirect basis of its
decision cannot be disputed by the same Party in a subsequent suit; similarly, a rule of law applied as decisive by the Court in one
case, should, according to the principle stare decisis, be applied by the Court as far as possible in its subsequent decisions. But it may
be necessary to view differently the same situation of fact in a different suit, of which the subject matter is different, and in which,
consequently, different principles should be applied. [p77]

[229] In the proceedings concluded by Judgment No. 7, the Applicant said that the Chorzów undertaking was not and had never been
from the outset (contract of 1915) an enterprise of the Reich, that the Bayerische was the business concern which worked it
(Publications of the Court, Series C., No. 11 - I, pages 351, 159), and the Applicant maintained, as to what had been the property of the
Reich until 1919-1920, that even admitting the nullity of the contract of 1919,

"the Oberschlesische Stickstoffwerke were entered in the land registers as owners and, in accordance with paragraph 891 of the
German Civil Code, if a right is entered in those registers in favour of a certain person, the presumption is that that person is the
possessor of the right. And should the contents of the registers not be in accordance with the real situation at law, the interested Party
may, under paragraph 894, call upon the person entered to have the entry rectified.....
If therefore the Polish Government considered that the contract of 1919 was fictitious, why did it not resort to the legal remedy afforded
by the Civil law in force?"

[230] Then, dealing with the question whether the contract of 1919 was, fictitious, or concluded in fraudemn creditorum, the Applicant
insisted that :

"The most favourable result for the Polish Government would therefore be that it could bring an action against the Oberschlesische for
the transfer to it of the ownership in the immovable property obtained by the Oberschlesische under a fraudulent contract."

[231] It is in accordance with these contentions of the Applicant that the Court, in Judgment No. 7, has said :

"In the present case, in fact, the Court holds that the Oberschlesische's right of ownership of the Chorzów factory must be regarded as
established, its name having been duly entered as owner in the land register. If Poland wishes to dispute the validity of this entry, it
can, in any case, only be annulled in pursuance of a decision given by the competent tribunal ; this follows from the principle of respect
for vested rights …..” [p78]

[232] Judgment No. 7, in so far as it relates to the Chorzów case, says, as had already been said in Judgment No. 7, that the Chorzów
undertaking was an entity of which the factory, which belonged at first to the Reich and afterwards to the Oberschlesische, was only
one constituent part; consequently, the undertaking as such did not fall within the scope of Article 256 of the Treaty of Versailles.
Judgment No. 7 also says in regard to the Oberschlesische, first, that the sale to the latter by the Reich was permissible from the point
of view of international law, and, secondly, as has been said above, that the name of the Oberschlesische had been entered in the land
register and that as a result of this, in the absence of a decision to the contrary by the competent municipal court, the presumption was
that the right of the Oberschlesische was established. The reason expressed in the words "its name having been duly entered as
owner in the land register" suffices to establish that, while the Geneva, Convention may have been violated by the failure to observe
the rules of municipal law regarding this entry, it is in this failure alone that the violation of the Geneva Convention consists in this
respect.

[233] The violation of the Geneva Convention cannot be effaced, ex post facto by a decision which should have preceded the vacation
of the rights of the Oberschlesische on the land register. That is all that is to be deduced from Judgment No. 7 as regards subsequent
decisions of competent municipal courts. As is also said in Judgment No. 8, an examination of the right of ownership:

"in order to justify such dispossession after it has taken place, cannot undo the fact that a breach of the Geneva. Convention has
already taken place, or affect the Court's jurisdiction."

[234] But, in the present proceedings, there is no question of deciding whether the breach was justified, or whether it has been effaced.
These two points are res judicata: both Parties agree that Judgment No. 7, in so far as it decides that there [p79] has been a breach of
the Geneva Convention, cannot be called in question, and the Respondent has not referred to any possibility of making good this
breach.

[235] The question to be decided now is entirely different. It is this: what was the loss actually sustained by the Oberschlesische?
There is nothing in Judgment No. 7 to prevent a subsequent decision by the competent tribunals, as to the existence and extent of
property rights at municipal law, nor is there anything to prevent such a decision being taken into account by the Court. There is neither
in the operative part nor anywhere else in Judgment No. 7 anything which might come either to appear erroneous or to be invalidated,
if the Court, in the present case, were to take into account the decision of the Tribunal of Katowice of November 12th, 1927.
Incidentally, that decision was given in accordance with the terms of the German Code of Civil Procedure which is in force in Polish
Upper Silesia, and therefore, having been rendered by default, does not contain a statement of the grounds on which it is based. The
fact that the passages in question in Judgment No. 7 were not made solely with regard to the case then before the Court, clearly
appears also from the interpretative Judgment No. 11 which says in regard to the passage beginning "If Poland wishes. . .":

"Though from the use of the present tense it may be concluded that the Court had in view the possibility of the institution by Poland,
even after the judgment, of proceedings with a view to obtaining the annulment of the entry by means of a decision of the competent
municipal tribunals, it would be contrary to the whole of the reasoning to construe it as a reservation implying that the binding effect of
the judgment given - and more especially of paragraph 2 (a) of the operative part thereof ("that the attitude of the Polish Government in
regard to the Oberschlesische Stickstoffwerke and Bayerische Stickstoffwerke Companies was not in conformity with Article 6 and the
following articles of the Geneva Convention")-were to depend on the result of such proceedings instituted subsequently."

[236] The same conclusion is indicated by the fact that the operative part of Judgment No. 11 definitely affirms that a declaration of the
ownership of the Oberschlesische had been made (in Judgment No. 7) with binding effect "in respect of that particular case". [p80]

II.

[237] In my opinion, the objections of the Respondent based on the view that the rights of the Reich both in the Chorzów enterprise and
in the shares (of the Oberschlesische) have passed to Poland under Article 256 of the Treaty of Versailles, should have been upheld.

[238] I hold that the Reich is owner of the shares of the Oberschlesische.

[239] I cannot accept the view that the question of the ownership of the shares is - though not res judicata in virtue of Judgment No. 7 -
no longer an open question since that judgment. All that is said in Judgment No. 7 on the question of the Treuhand as owner, is to be
found in an incidental observation in the following context :

"Moreover, it was the Bayerische which, in conjunction with another Company, the Deutsche Petroleum A.-G., had founded the
Treuhand which owned all the shares of the Oberschlesische; and the purchase of the factory by the latter may therefore be regarded,
in a sense, as the exercise, modified in accordance with circumstances, of the right of purchase possessed under the contract of March
5th, 1915, by the Bayerische which, by itself, had not the necessary funds at its disposal."

[240] On December 24th, 1919, were concluded simultaneously:

(1) the memorandum of association of a new limited liability company (hereinafter called the Treuhand) with a share capital of 300,000
marks, increased the same day to 1,000,000 marks;
(2) the memorandum of association of a new joint stock company (hereafter called the Oberschlesische) with a share capital of
250,000 marks, increased the same day to 110,000,000 marks; [p81]
(3) a contract between the Reich, the Oberschlesische and the Treuhand, by which the Reich left over to the Oberschlesische the
Chorzów factory; the contract laid down the principles on which the purchase price (Uberlassungspreis) was to be calculated, and
added that this price represented, according to the documentary evidence then existing, about 110,000,000 marks, and that on this
sum would be reckoned interest at 5 % from December 31st, 1919. The contract continued as follows:

Ҥ 3. The purchase price (Kaufpreis) and the interest will be liquidated by paying to the Reich the whole of the net profit shown by the
balance sheet (of the Oberschlesische).”

[241] After adding that larger payments in liquidation of the debt would be permissible at any time, the contract proceeded.

Ҥ 4. The Treuhand will assume in place of the Oberschlesische, as sole debtor, in accordance with the provisions laid down above, all
the obligations imposed by their contract upon the Oberschlesische in respect of the Reich.
§ 5. The interest and capital of the purchase price shall be liquidated exclusively by the payment to the Reich of the profits on the
shares (of the Oberschlesische) . . . ."

[242] The contract also stipulated that the Oberschlesische should increase its capital to a sum equal to the purchase price of the
factory and that as guarantee for the claims of the Reich under this contract, the Treuhand should

"undertake to obtain for the Reich a lien on all existing shares of the Oberschlesische after this increase, with the effect that the Reich
will be authorized itself to exercise all rights derived from the possession of the shares and especially the right to vote at general
meetings of shareholders".

[243] The, Reich agreed, in its capacity as holder (Inhaber) of the shares, to maintain the rights of the Bayerische resulting from
previous contracts between the Reich and the Bayerische. The Treuhand might at any time pay the whole or a part of the capital and
interest and, if a part of the purchase price were refunded, shares of a nominal value corresponding to the payment would be released
from the lien, whereas the reduction of the capital sum by the payment of the profits of the Oberschlesische would liberate no shares
from the lien. But – [p82] the contract proceeded - the Stickstoffwerke (a designation used in the contract to denote the
Oberschlesische)

"can only claim the handing over of the shares if and in so far as they may sell shares to a third party with the consent of the Reich.
Until such time the shares will remain in possession of the Reich, which will continue to exercise all rights derived from possession of
the shares, including the right to vote at general meetings of shareholders."

[244] The contract lays down that any alienation (sale, transfer, pledging, pooling, leasing, or grant of a right to receive dividends, in
short, any kind of disposal) of the shares or of a part thereof will only be permitted, even after the expiration of the lien, with the consent
of the Reich, and that, as a guarantee of compliance with this obligation, the Reich will retain possession of the shares even after the
expiration of the lien.
[245] Finally, there were provisions concerning the sale of the shares by the Reich, in which case the Treuhand might declare its
readiness to acquire (erwerben) the shares at the price which the Reich was prepared to accept, and if the Treuhand made no such
declaration, it was to receive 10 % of the surplus remaining after deduction of the capital sum and of the arrears of interest of the price
of the factory; if, on the other hand, the Treuhand wished to dispose of the shares or a part thereof, which it could never do without the
consent of the Reich, the Reich was to obtain out of the purchase price the total sum due to it and the arrears of interest plus 85 % of
the surplus, the remainder of the surplus going to the Treuhand.

[246] The shares of the Oberschlesische were shares to bearer (Inhaberaktien); the Treuhand was never mentioned in the contract as
owner of the shares; it could only obtain them, even after having paid the whole of the debt with all interest, by acquiring (erwerben)
them if the Reich were willing to sell them and if it (the Treuhand) availed itself of the right of preemption; it could decide nothing as to
the sale of the shares without the Reich's consent; if on the other hand the Reich wished to dispose of them, the Treuhand had only a
right of preemption; it could not exercise the rights of a shareholder, until it had "acquired" the shares under the conditions indicated or
by permission (by sufferance) of the [p83] Reich. On the other hand, the Reich was always, in all circumstances, to remain holder of
the shares (Inhaber of the Inhaberaktien) until the moment when it decided to alienate them.

[247] A limited liability company which had just been formed could hardly guarantee to the Reich a debt amounting to 110 times its
capital. At all events, the Treuhand's only responsibility towards the Reich was to obtain for it the shares of the Oberschlesische, a
thing which it was able in principle to do there and then at no expense. Over and above the right of preemption which I have
mentioned, the Treuhand had only a hypothetical right to a commission. Indeed, it is in the Case of the applicant Government in the
proceedings concluded by Judgment No. 7 that the difference of 5 % has been described as a "commission" (Publications of the Court,
Series C., No. 11 - I, page 356). It is obvious that an owner does not receive commission on the sale of his own property.

[248] Even if it be sought to deny that the Reich was owner of the shares of the Oberschlesische, it is impossible to deny that it had a
complete and perpetual right of antichresis in virtue of which it was the owner in so far as all third parties were concerned. The only
restriction upon it, namely the obligation to maintain the management in certain hands for a limited time, cannot be looked upon as a
real obligation, but as a purely personal obligation, which cannot affect the position of the Reich as the actual shareholder.

[249] The question of the alleged control of the Reich over the Oberschlesische has been left open by Judgment No. 7.

[250] All that is to be found on the subject in Judgment No. 7 is confined to the two following paragraphs:

"In a similar connection, the further question might be examined whether the Oberschlesische, having regard to the rights conferred by
the contract of December 24th, 1919, on the Reich in respect of that Company, should be regarded as [p84] controlled by the Reich
and, should this be the case, what consequences would ensue as regards the application of the Geneva Convention.

It is, however, not necessary for the Court to go into this question. The Respondent, who adopts the standpoint that no measure of
liquidation has been taken by the Polish Government in respect of the Chorzów factory, has not raised it, even as a subsidiary point,
and it would seem that he does not dispute-apart from.-the argument regarding the fictitious character of the agreements of December
24th, 1919 - the fact that the Oberschlesische is a company controlled by German nationals."

[251] It appears from these paragraphs that the Court had not considered the question of control in Judgment No. 7. It also appears
that it "seemed" that Poland did not dispute the contention that the Oberschlesische was controlled by German nationals and not by the
Reich. Even if the Court had dealt with this question, it would only have dealt with it as with an incidental and preliminary point;
consequently, even if the Court had decided the point, its decision would not have the force of res judicata; a fortiori, it is impossible to
argue that because the Respondent did not raise this incidental and preliminary point, it was thereby debarred from ever raising it.

[252] Even admitting for the sake of argument that the Reich was not the owner of the Oberschlesische's shares, it would still be true
that that Company was exclusively controlled by the Reich. It would be difficult to conceive a clearer case of control by the Reich than
that of a company of which all the shares, and bearer shares at that, remained in the hands of the Reich which had all the rights of a
shareholder in perpetuity, subject only to the possibility of sale if it saw fit, in which case it would receive practically the whole' sale
price, these rights of the Reich being limited only by a contractual obligation to maintain in certain hands, and for a certain time, the
management of the works owned by the Company.

[253] The right s of the Reich fall within the scope of Article 256 of the Treaty of Versailles of which paragraph I is as follows: [p85]

"Powers to which German territory is ceded shall acquire all property and possessions situated therein belonging to the German
Empire or to the German States, and the value of such acquisition shall be fixed by the Reparation Commission, and paid by the State
acquiring the territory to the Reparation Commission for the credit of the German Government on account of the sums due for
reparation."

[254] The interpretation of this article as found in Judgment No. 7 has not the force of res judicata.
[255] In declaring that it had jurisdiction to deal with the case decided by Judgment No. 7, the Court in Judgment No. 6 said :

“It is true that the application of the Geneva Convention is hardly possible without giving an interpretation of Article 256 of the Treaty of
Versailles and the other international stipulations cited by Poland. But these matters then constitute merely questions preliminary or
incidental to the application of the Geneva Convention."

[256] This point of view was in accordance with that of the Applicant, on whose behalf the following observation was made during the
hearing in regard to the question of jurisdiction :

"And if it [Article 256] is to be taken into consideration solely on this ground (erroneous citation thereof by the Polish Government), it is
only as a preliminary question to be decided incidentally."

[257] If the Reich either was the sole owner of the shares of the Oberschlesische, or controlled the Oberschlesische, the whole of the
property of that Company in Polish Upper Silesia falls under the provisions of Article 256. Such is actually the case.

[258] But, even if this were not so, the rights of the Reich should in any case be regarded as situated in Polish Upper Silesia.

[259] It appears to me impossible to hold that these rights consisted entirely or for the most part, in the so-called claim against the
Treuhand, a claim which was only guaranteed by a lien on the shares. The Treuhand was a limited liability [p86] company with a capital
amounting to less than 1% of the sale price of the factory; the balance sheet of the Treuhand drawn in 1924, mentioned a capital of
1,000 RM. so that this Company cannot reasonably be held to be indebted for value which the applicant Government has estimated in
the present proceedings at a figure in any case exceeding 50,000,000 RM. Furthermore, it does not appear from the contract of 1919
that the Treuhand had any obligation towards the Reich; by handing over to it all the shares of the Oberschlesische, it freed itself from
any possible obligation. In the proceedings leading up to Judgment No. 7, the Applicant stated that the Treuhand was "merely a legal
device for the exercise of shareholders' rights ; it was not essential. It was created in order to provide a special mechanism for the sale
of the shares and also so as not to burden the balance sheets of the other companies with the debt arising from the contract of
purchase and sale" (Publications of the Court, Series C., No. 11 - I, page 241). It must be remembered that the Treuhand was a limited
liability company whose obligations would not therefore involve obligations on the part of the companies which formed it.

[260] The fact that the Treuhand does not regard itself as the Reich's debtor also appears from the fact that in its gold-balance sheet
drawn up for the first time in 1924, there appear neither the shares of the Oberschlesische, the value of which was considered fictitious,
nor the debt to the Treasury. This is explained in a letter from the Treuhand to the Deutsche Bank, submitted to the Court by the
Applicant, in the following terms

"It follows naturally that the balance sheet also cannot include amongst the liabilities, a debt to the Treasury of the Reich. The value of
the shares in the balance sheet must be set off against the debt. But since it is impossible to assess the value of the shares in the
balance sheet, owing to the seizure of the factory, our obligation towards the Reich Treasury also disappears (fallt…fort).

[261] Even admitting for the sake of argument that the Reich had a genuine claim upon the Treuhand, it cannot be denied [p87] that
that claim would be localized in Polish Upper Silesia, since the Chorzów factory constituted the only property of the Oberschlesische
and since all the net profits of the Oberschlesische and consequently all the net profits of the undertaking, except perhaps certain very
small deductions, were to be paid to the Reich, which moreover, in virtue of its position as sole shareholder, had the whole of the
property of the Oberschlesische at its disposal. It appears to me impossible to deny that the terms of Article 256 of the Treaty of
Versailles would apply to a factory situated in ceded territory, a factory of which all or nearly all the net profits went to the Reich and
over which the Reich had in fact all possible rights of ownership, except that, for a certain time, it was obliged by a contract not to
change the management.

[262] I find it impossible to hold that the rights of the Reich are not situated in Upper Silesia, on the ground that these rights are rights
as against the Treuhand, the registered office of which is in Germany. For it would follow that, contrary to what the Court has laid down
in Judgment No. 7, Poland has not expropriated the contractual rights of the Bayerische, since these rights were derived from contracts
between the Bayerische and the Reich and later, between the Bayerische and the Oberschlesische, that is to say, between Parties
which, according to the judgment just given, were all domiciled in Germany. Yet the Court did decide in Judgment No.7 t at these
contractual rights of the Bayerische related to the factory and were so to speak concentrated in that factory. From this the Court drew
the conclusion that they should not have been expropriated, having regard to the last sentence of Article 6 of the Geneva Convention,
which lays down that, with certain exceptions, "property, rights and interests of German nationals or of companies controlled by
German nationals, cannot be liquidated in Polish Upper Silesia".

[263] Article 256 must be construed in good faith and consequently in accordance with the principle that the real state of things must be
ascertained and that no decisive value must be attached to mere legal forms. Again, the interpretation of this article [p88] must take
into account the economic conditions of which legal forms are merely an outward expression. Legal forms such as a joint stock
company must serve the objects of economic life, but they must not obscure economic facts. There is no doubt that a joint stock
company is very closely bound up with its property ; that is why, for instance, according to the German Commercial Code, which is in
force both in Germany and in Polish Upper Silesia, a total alienation of the property of a company involves in principle the liquidation of
that company. It must be remembered that the rights of the Oberschlesische in the Chorzów undertaking constituted its sole property.
During and since the world war, it has been found more and more necessary to define the nationality of joint stock companies in
accordance with economic facts (for instance the question of control) instead of by means of formal criteria such as the registered
office of the place of registration. Quite recently the House of Lords refused to admit that a company which was registered in London
and had a secretary there, but of which the whole commercial activity was carried on in Egypt, was "resident" in England. Lord Sumner,
who delivered the leading judgment, declared the argument to be "too transcendental for acceptance" (Egyptian Delta Land and
Investment Co., Ltd., v. Todd). It seems to me impossible to deny that for the purposes of Article 256 the commercial domicile of the
Oberschlesische was not at Chorzów, assuming that one regards that Company as the owner of the factory.

[264] I cannot agree that it is the Bayerische which had control over the [p89] Oberschlesische. Control is the power of final decision
belonging to the shareholder, but not the power to appoint under an obligation accepted by the shareholder, the board of management
or some of its members. Again, since the Oberschlesische has, at the utmost, succeeded to the rights of the Reich and since the
Bayerische has only retained the powers held by it under the contract with the Reich, it cannot be argued that the Bayerische had
control over the owner of the factory; for the owner, before the Oberschlesische, had been the Reich itself.

III.

[265] Assuming that the Oberschlesische was legally owner of the factory at Chorzów and that it was neither identical with the Reich as
treasury nor controlled by it, it must also be held that the Oberschlesische has suffered no material damage.

[266] It is not disputed that if it had suffered such damage, this should have been taken into account in fixing the amount of the
indemnity to be paid to Germany.

[267] But the indemnity can only include the amount corresponding to the damage actually sustained by the persons whose losses
should, according to the claim of the German Government, serve as a basis for the assessment of compensation in the present case.
For this reason, damage sustained by any third person, and amongst others by the Reich Treasury, must be left out of account ; for the
German Government has not asked the Court to take into account damage suffered by itself (its Treasury). The Court has only to
estimate the loss suffered by the Oberschlesische and Bayerische, in accordance with the principle non ultra petita.

[268] The loss caused to any given person can only be quantum ejus interest. If two persons have different rights over a piece of land,
one being the owner, and the other being owner of land in favour of which a servitude over the land has been established, the
reparation due to each of these persons will be represented by the value of his right, excluding the value of the rights of the other
person. It is true that the amount of debts and other obligations, for which the injured person is responsible, must not be excluded; but
by this is meant only personal debts and other personal obligations. On the other hand, the reparation of the loss caused, for instance,
by the destruction of a house-whether the person concerned be owner, tenant, or owner of a property in favour of which a servitude
exists-, would only cover the value of the rights of the particular person, excluding the rights of every other person. [p90]

[269] Now, if the interests of the Reich be excluded, no material injury could have been suffered by the Oberschlesische ; for the Reich
had, to the exclusion of anyone else, all rights of ownership in the factory; thus, in the exercise of its rights as shareholder, it could
alienate the factory; it could also draw from it all the net profits. If the shareholder were not identical with the Reich, he had never
obtained and could never obtain from the factory any profit except that which the Reich, in the exercise of its rights at the general
meeting of shareholders, chose to grant him.

IV.

[270] Any assessment of the damage resulting from the taking over of the enterprise must be based on the extent of the damage
suffered at the time of dispossession. If there were delay in payment, the damage may be increased by the amount of the loss resulting
from such delay ; this loss may either be expressed in terms of interim interest, or may be estimated by taking into account, according
to the circumstances, the balance of the profit and loss which, in all probability, would have accrued between the date of dispossession
and the date of judgment. It is impossible to take as the date of assessment a date subsequent to dispossession, unless it were the
fault of the Respondent that the claim could not be brought earlier before the international tribunal.

[271] Moreover the German Government itself has asked for a sum consisting of the capital amount and of interest calculated as from
1922.

[272] It should be added that in the present case no subjective consideration enters into account, such as a wrongful act entailing
damages which should be calculated on some special basis; indeed the Court cannot presume that there has been anything but an
error on the part of Poland in construing and applying the Geneva Convention.

V.

[273] It is not permissible to infer from the articles of the Oberschlesische, the existence of a vested right on its part to [p91] work the
so-called chemical factory. The articles of a joint stock company are, from a legal point of view, only a contract .of private law, which,
according to the commercial code, must be entered in the commercial register. Such an entry merely establishes that the rules of the
commercial code have not been infringed in the formation of the Company. It does not involve any right to carry on the activities
contemplated in the contract.
(Signed) Ludwik Ehrlich

[p92] Observations by M. Nyholm.

[274] The wish to have recourse to expert opinion for the purpose of estimating the compensation due in respect of the Chorzów
factory is certainly legitimate, but is it also possible to obtain a result by this means? If it were a question of an expert report on a purely
mathematical basis, such as the drawing up of a balance sheet prepared from accounts, experts appointed by the Court and by the
Parties - working entirely independently and with no liaison with the Court, on a footing of equality amongst themselves and authorized
to obtain any information - would doubtless be of decisive assistance in arriving at a just settlement of the matter. But in this case the
hypothetical nature of the questions involves an equally hypothetical answer. As it is a question of estimating what financial results the
factory would have produced between 1922 and 1928, if it had remained in German hands, the experts will find themselves in a sphere
in which they will have difficulty in replying otherwise than by hypothetical answers.

[275] A considerable number of circumstances enter into account. Amongst others the capacity of the various persons concerned in the
management to undertake technical control and to take advantage of the situation of the general market and of the formation of the
various groups of factories into consortiums which is a characteristic of the years 1922-1928; the capital which might have been at the
disposal of the factory, the favourable or unfavourable effect of Polish legislation, etc.

[276] The answer can hardly take the form of the indication of a precise sum which would enable the affair to be immediately settled.

[277] Even supposing that, thanks to the declarations of the experts, it might be possible to arrive more nearly at the true situation, the
greater or less degree of progress thus made would not be of much importance in a case when the Court's estimate must always be
based on a number of detailed decisions, all arrived at separately, in order to reach [p93] the total sum. It matters but little whether in
regard to some points the figure estimated is for instance 110 instead of 100, if the net result of all the decisions is still in the nature of
an approximation.

[278] It may be wondered therefore whether it is worth while to delay the settlement of the case and to incur the difficulties connected
with an expert report, including amongst others the choice of the experts who must, if they are to perform their task properly, possess
qualifications but seldom found in one and the same person.

[279] In the end the Court may be confronted with precisely the same situation as before the expert report and may find that the
discussion upon the report between the Parties involves a rediscussion of the case on the same bases as those already considered.

[280] Again, the numerous data afforded by the documents in the case would appear to make an immediate decision possible. A study
of the information and statistics furnished by the documents in regard for instance to the condition of the factory and general
development in the industry in question would appear to afford a sufficient basis for the general assessment which the Court must in
any case undertake. The application, mutatis mutandis, of this information to the sister factory of Piesteritz would seem particularly
likely to produce useful results. There would seem to be a possibility of obtaining corroborative evidence, for instance, by examining
the offer of sale made to the Swiss Company, taking into account the situation existing at that time.

***

[281] Certain points in this case, which as a whole is of a specific nature, may attract attention from the point of view of law.

[282] As regards the assessment of the damage, the Respondent again seeks in the present proceedings to revert to points already
dealt with, maintaining that it should not pay the [p94] indemnity because it is not the two Companies which are entitled to receive it,
but the Reich. These questions have been decided by Judgment No. 7, which definitely lays down that any damages are due to the two
Companies and not to the Reich, which is not the owner, since it sold the factory under the contracts of 1919. The judgment therefore
unnecessarily again deals with the Polish objections on this point.

[283] The Polish contention based on Article 256 of the treaty of Versailles, again seeks to show that the Reich should be regarded as
owner. But this question is already dealt with by the decisions of Judgment No. 7. This is also the case as regards the position of the
Reich as pledgee.
The Court therefore need not again concern itself with this. If Poland is to succeed in her claim based on Article 256, it must be before
some other tribunal and not this Court. If she succeeded in establishing her claim before such other tribunal, the result would simply be
that Poland would in the future regain what she has to pay now. This claim, therefore, cannot be opposed to the decision contained in
Judgment No. 7, which is being applied by the present judgment. There is therefore no reason for again undertaking an examination of
Article 256, as is done in the judgment; nor need the Court again consider the question whether the Reich has become owner in
consequence of its position as pledgee. This matter, as also the question regarding Article 256, relates to a stage reached long before
the present judgment, and it cannot be reopened on the pretext that, when the preceding judgments were given, the question was to
establish the principle of damages, but that now the problem is to estimate these damages. Both are points which have already been
decided.

***

[284] A question of more general legal interest arises as regards the situation of Germany in the proceedings; that Germany alone, to
the exclusion of the two Companies, can sue, is undeniable, since this is a suit within the jurisdiction of the Permanent Court, which is
open only to States. But what is [p95] the situation of Germany as regards the claim for indemnity? It cannot be denied that judgment
must in form be given in favour of the German State; but since the damage has been sustained by others, it is not in the capacity of
owner that Germany can claim an indemnity. The claim put forward in the Reich's conclusions seems rather to relate to the award of a
sum as reparation for wrong inflicted upon its subjects. In the judgment the expressions vary: "The amount of compensation to which
the German Government is entitled, on the basis of the damage suffered by the two Companies" (page 55). Another passage runs as
follows: "What sum must be awarded to the German Government in order to enable it to place the dispossessed Companies.... in the
economic situation... ? " (page 49). A precise indication of the Applicant's position is not to be found in the judgment. It seems that the
problem may be solved in accordance with the following considerations.

[285] The asset claimed by the two Companies is in itself an asset in the hands of the Polish State, which may be claimed by civil
action against the Polish Government and under Polish law; but as the result of the Geneva Convention, the asset has acquired also
an international character. In seizing the factory the Polish Government has also infringed the obligations accepted by it as regards the
German State. In basing its action on this infringement, Germany is relying on the wrong done to the Companies; but she cannot lay
claim to the indemnity as her own property. Germany may suffer, as the result of Poland's action, moral damage represented by the
demand for an imaginary sum, and also, maybe, material damage; but the latter is always based on a fact affecting the State itself. To
measure such damage by the actual amount of damage caused to its subjects is to make a claim that, finds no support save as
regards the special cases where the wrong done to subjects directly affects the State as being privately interested in the enterprise. In
the present affair such a case might have arisen, owing to the situation of Germany as pledgee; no such claim has however been put
forward in the proceedings. The State must therefore, as far [p96] as itself is concerned, limit its claim to the moral or material damage
directly caused to it. But at the same time international precedent has laid down that the State may put forward before an international
court the claims of its subjects, may "take up" their case, with the result that such claims must then be decided according to
international law (see judgments of the Permanent Court of International Justice - Wimbledon and Mavrommatis affairs).

[286] In this situation the new question arises, since the creation of the International Court, whether the State has the right to take upon
itself or at any rate to bring before the Court on its own initiative the claims of individuals.

[287] As regards this point, it appears that there is no reason for assuming that in international law any change has taken place in the
general principles which grant to individuals the protection of their property rights. These rights remain always protected, and the
putting forward of a particular claim in international proceedings can only be the result of the existence of a tacit or expressed mandate,
arising either from a demand or from the consent of the Parties. That such a mandate exists in the present case cannot be doubted.
The documents in the case show that the German State is working in full collaboration with the Companies, who have evidently
supplied all information in order that the proceedings may have a favourable issue. From what precedes it results that the claims must
indeed be granted to the German Government in name, but only as mandatory for the Companies. The Court cannot therefore award
the money to Germany without further comment and without considering the question whether the German State can in law make free
disposition of the amount of the indemnity as owner, and without the legal obligation to pay it to the parties dispossesses. The position
of the Applicant must be regarded as one of mandatory.

***

[288] The argument set out above has an effect upon the question of the award of a lump sum in compensation in favour of the two
Companies, the system adopted by the judgment. In the [p97] documents there is indeed no trace of the existence of a mandate
conferring on the German State the right to lump together the two claims. On the contrary, the whole of the pleadings were conducted
on the basis of a complete separation.

[289] The amalgamation of the claims of the Oberschlesische and Bayerische, officially declared by the judgment, seems therefore to
have no support in law. And further, in fact, it meets with great difficulties. The claim of the Bayerische is composed of one part
representing a percentage on the profits of the Oberschlesische; but there are other special claims, rights resulting from the
management of the factory in relation to other factories united in a consortium under the direction of the Bayerische. As regards the
relations between the two Companies, the figures cannot be compared -for from a financial point of view we have on the one hand a
balance sheet for the Oberschlesische for 1928, or a question of capital, and on the other hand, for the Bayerische, a remuneration for
the exploitation running as far as 1941. There seems therefore to be no reason for departing from the express wishes of the Parties set
out in the pleadings.

[290] As regards the question of set-off, the judgment has concluded that there was no ground for deciding it, especially because, in
any case, the matter had not been raised by the Respondent. It appears therefore that the Court decides that it has jurisdiction.

[291] On the other hand, the judgment states (page 61) that: "It is clear that the question whether international law allows claims to be
set off against each other and if so under what conditions such set-off is permitted is in itself outside the jurisdiction derived by the
Court from Article 23 of the Geneva Convention."

[292] This paragraph appears to have for consequence a declaration of want of jurisdiction to deal with the dispute itself.

[293] It appears however that the Court, which has jurisdiction .as regards the sums in dispute, will also have the right to [p98] hear and
determine the objections. To those which relate to the extinction of the credit claimed may be added the declaration of a set-off which
cancels out the credit. In international law no principle can be raised which would establish on this subject a difference between
national and international law.

(Signed) D. G. Nyholm.